If supply is P = 50 + Q and P = $100,the price elasticity of supply is

Question

Quizplus · Accepted Answer

Price elasticity of supply (PES) is the percentage change in quantity supplied divided by the percentage change in price.

Given: 
P = $100 
Supply function: P = 50 + Q

To find the quantity supplied at $100: 
$100 = 50 + Q 
Q = 50

To find the quantity supplied at a slightly higher price (let's say $110): 
$110 = 50 + Q 
Q = 60

Therefore, the percentage change in quantity supplied is: 
(60 - 50)/50 x 100% = 20%

And the percentage change in price is: 
(110 - 100)/100 x 100% = 10%

Using the formula: 
PES = % change in quantity supplied / % change in price

PES = 20% / 10% 
PES = 2

Thus the answer is C, as the Price elasticity of supply is 2.

If Supply Is P = 50 + Q and P