Figure 6-7
-Refer to Figure 6-7.What is the value of the price elasticity of supply between g and h?
A) 20 percent
B) 0.5
C) 2
D) 0.02

Question

Figure 6-7 
-Refer to Figure 6-7.What is the value of the price elasticity of supply between g and h?
A) 20 percent 
B) 0.5 
C) 2 
D) 0.02

Quizplus · Accepted Answer

The price elasticity of supply (PES) between g and h can be calculated as:
PES = percentage change in quantity supplied ÷ percentage change in price
From point g to h, the quantity supplied increases from 30 to 70 (a change of 40) while the price increases from $20 to $40 (a change of 100%). Therefore, the PES can be calculated as:
PES = (40 ÷ 30) ÷ (100 ÷ 20) = 2
So, the correct choice is C, which represents the value of 2.

Figure 6-7 -Refer to Figure 6-7.What Is the Value of the Price