The price elasticity of supply for toys is 0.36, so that a 1 percent increase in price would generate a
A) 0.36 percent increase in quantity supplied
B) 3.60 percent increase in quantity supplied
C) 0.36 percent decrease in quantity supplied
D) 3.60 percent decrease in quantity supplied
E) 1.36 percent increase in quantity supplied

Question

Quizplus · Accepted Answer

The price elasticity of supply measures how much the quantity supplied of a good responds to a change in the price of that good. A price elasticity of supply of 0.36 means that a 1 percent increase in price leads to a 0.36 percent increase in quantity supplied.

The Price Elasticity of Supply for Toys Is 0