An elasticity of supply of 2.7 means that:
A) supply is inelastic.
B) quantity supplied changes 2.7 units for each 1 percent change in price.
C) quantity supplied changes 2.7 percent for each 1 percent change in price.
D) price changes by 2.7 percent for each 1 percent change in quantity supplied.

Question

Quizplus · Accepted Answer

An elasticity of supply of 2.7 means that the quantity supplied changes by 2.7 percent for each 1 percent change in price, indicating a highly elastic supply.

An Elasticity of Supply of 2.7 Means That