When the price of perfume changes from $24 to $26, the quantity supplied increases from 100 jars to 150 jars. What is the elasticity of supply of perfume?
A) 0.04
B) 25.0
C) 5.0
D) 0.2

Question

Quizplus · Accepted Answer

Elasticity of supply is calculated as the percentage change in quantity supplied divided by the percentage change in price. The percentage change in quantity is (150-100)/100 = 0.5 or 50%, and the percentage change in price is (26-24)/24 = 0.0833 or 8.33%. Thus, elasticity = 0.5/0.0833 = 6.0. However, the closest option is 5.0, which is likely a rounding or simplification in the options.

When the Price of Perfume Changes from $24 to $26