A 5 percent increase in the price of corn flour that results in a 15 percent increase in the quantity supplied yields a price elasticity of supply for corn flour of:
A) 2.0.
B) 2.5.
C) 3.0.
D) 3.5.

Question

Quizplus · Accepted Answer

The price elasticity of supply is calculated as the percentage change in quantity supplied divided by the percentage change in price. Here, it is (15% / 5%) = 3.0.

A 5 Percent Increase in the Price of Corn Flour