If the elasticity of supply of a good was 2, how much would the price have to increase to lead to an increase in output of 6 percent?
A)3 percent.
B)4 percent.
C)8 percent.
D)12 percent.

Question

If the elasticity of supply of a good was 2, how much would the price have to increase to lead to an increase in output of 6 percent?
A)​3 percent.
B)​4 percent.
C)​8 percent.
D)​12 percent.

Quizplus · Accepted Answer

The elasticity of supply is calculated as the percentage change in quantity supplied divided by the percentage change in price. If the elasticity is 2 and the quantity supplied increases by 6%, the price must increase by 3% (6% / 2 = 3%).

If the Elasticity of Supply of a Good Was 2