At a price of $4, quantity supplied is 100, and at a price of $6, quantity supplied is 120. Using the midpoint formula, the price elasticity of supply is ________ and supply is ________.
A) 0.1; inelastic
B) 0.45; inelastic
C) 2.2; elastic
D) 10; elastic

Question

Quizplus · Accepted Answer

The midpoint formula for price elasticity of supply is [(Q2 - Q1) / ((Q2 + Q1) / 2)] / [(P2 - P1) / ((P2 + P1) / 2)]. Plugging in the values: [(120 - 100) / (120 + 100) / 2] / [(6 - 4) / (6 + 4) / 2] = 0.45, which is inelastic.

At a Price of $4, Quantity Supplied Is 100, and at a Price