As price rises from $22 to $26, quantity supplied rises from 100 to 110 units and quantity demanded falls from 90 units to 65 units. It follows that supply is __________ and demand is __________.
A)inelastic; elastic
B)elastic; inelastic
C)inelastic; unit elastic
D)elastic; elastic
E)unit elastic; inelastic

Question

Quizplus · Accepted Answer

Supply is inelastic because the percentage change in quantity supplied (less than 10%) is less than the percentage change in price (over 18%). Demand is elastic because the percentage change in quantity demanded (more than 28%) is greater than the percentage change in price.

As Price Rises from $22 to $26, Quantity Supplied Rises