Exhibit 5-8 Supply and demand curves for good X

-As shown in Exhibit 5-8, the price elasticity of supply for good X between points E and X is:
A) 1/5 = 0.20.
B) 1/11 = 0.91.
C) 1/2 = 0.50.
D) 5/11 = 0.45.

Question

Exhibit 5-8 Supply and demand curves for good X
​ 
-As shown in Exhibit 5-8, the price elasticity of supply for good X between points E and X is:
A) 1/5 = 0.20. 
B) 1/11 = 0.91. 
C) 1/2 = 0.50. 
D) 5/11 = 0.45.

Quizplus · Accepted Answer

The price elasticity of supply is calculated as the percentage change in quantity supplied divided by the percentage change in price. The given choice D (5/11 = 0.45) is the correct calculation based on the data provided between points E and X.

Exhibit 5-8 Supply and Demand Curves for Good X