Suppose that the price of a product increased from $18 to $22,and the quantity supplied increased from 200 to 240.What is the value of the supply elasticity?
A)0.28.
B)0.91.
C)1.0.
D)1.1.
E)3.6.

Question

Quizplus · Accepted Answer

The supply elasticity can be calculated using the formula: Elasticity = (% change in quantity supplied) / (% change in price). % change in quantity supplied = (240 - 200) / 200 = 0.2 or 20%. % change in price = (22 - 18) / 18 = 0.222 or 22.2%. Therefore, Elasticity = 20% / 22.2% = 0.9 (approximately). The closest option is B) 0.91.

Suppose That the Price of a Product Increased from $18