If the price of a a good increases by 10 percent and the quantity supplied increases by 5 percent,then the elasticity of supply is
A) greater than one and supply is elastic.
B) negative and supply is inelastic.
C) less than one and supply is elastic.
D) less than one and supply is inelastic.
E) greater than one and 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 5% / 10% = 0.5, which is less than one, indicating that supply is inelastic.

If the Price of a A Good Increases by 10