Assume the price elasticity of supply for grade wheat has been estimated to be +0.82.This means that when the price of wheat increases by 10 percent,the quantity of wheat supplied to the market increases by 82 percent.

Question

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The price elasticity of supply of +0.82 means that when the price of wheat increases by 10 percent, the quantity of wheat supplied to the market increases by 8.2 percent, not 82 percent.

Assume the Price Elasticity of Supply for Grade Wheat Has