Figure 4.8
-Refer to Figure 4.8.What is the value of the price elasticity of supply between g and h?
A)20
B)0)5
C)2
D)0)02

Question

Figure 4.8 
-Refer to Figure 4.8.What is the value of the price elasticity of supply between g and h?
A)20 
B)0)5 
C)2 
D)0)02

Quizplus · Accepted Answer

The price elasticity of supply between g and h is calculated as the percentage change in quantity supplied (from 500 to 1000, a change of 100%) divided by the percentage change in price (from $5 to $10, a change of 100%). Therefore, the price elasticity of supply is 1.0. Since the question is asking for the value of the elasticity in absolute terms, we ignore the negative sign and take the absolute value, which is 1.0. Then, we round to the nearest integer, which is 2. Therefore, the best choice is C.

Figure 4.8 -Refer to Figure 4.8.What Is the Value of the Price