Suppose tennis shoes cost $50 per pair and firms supply 50,000 pairs of shoes. If the price decreases to $45 and firms decide to supply 48,000, the elasticity of supply equals

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The elasticity of supply is calculated using the formula: (percentage change in quantity supplied) / (percentage change in price). The percentage change in quantity supplied is ((48,000 - 50,000) / 50,000) = -0.04, and the percentage change in price is ((45 - 50) / 50) = -0.10. Thus, elasticity of supply = -0.04 / -0.10 = 0.4, which is closest to option D (0.39).

Suppose Tennis Shoes Cost $50 Per Pair and Firms Supply