If a 3 percent increase in the price of tennis shoes leads to a 7 percent increase in the number of tennis shoes supplied
A) the elasticity of supply equals 0.43.
B) the elasticity of supply equals 2.33.
C) income elasticity equals 2.33.
D) supply is inelastic.

Question

Quizplus · Accepted Answer

The elasticity of supply is calculated as the percentage change in quantity supplied divided by the percentage change in price. Here, it is 7% / 3% = 2.33.

If a 3 Percent Increase in the Price of Tennis