The price elasticity of supply for umbrellas is 2.Suppose you're told that following a price increase, quantity supplied increased by 30 percent.What was the percentage change in price that brought this about?
A)60 percent
B)15 percent
C)6.7 percent
D)impossible to determine without additional information

Question

Quizplus · Accepted Answer

Price elasticity of supply is defined as the percentage change in quantity supplied divided by the percentage change in price. We have been given the elasticity of supply as 2, which means that 1% increase in price will lead to a 2% increase in quantity supplied. 
Let x be the percentage change in price that led to a 30% increase in quantity supplied. We can write the following equation based on the given information:

2 = 30/x

Solving for x, we get x = 15%. Therefore, the percentage change in price that brought about a 30% increase in quantity supplied is 15%. So, the answer is B.

The Price Elasticity of Supply for Umbrellas Is 2