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Fact 4.3.1 Weak coal prices hit China's third-largest coal miner
The chairman of Yanzhou Coal Mining reported that the recession had decreased the demand for coal, with its sales falling by 11.9 percent, despite a 10.6 percent cut in price.
Source: cbc.ca, February 5, 2014
-The price elasticity of supply of coal at Yanzhou Coal Mining is
A)1.12.
B)0.89.
C)11.2.
D)-1.12.
E)8.9.

Question

Quizplus · Accepted Answer

The price elasticity of supply is calculated as the percentage change in quantity supplied divided by the percentage change in price. Here, the quantity supplied decreased by 11.9% and the price decreased by 10.6%, giving an elasticity of 11.9/10.6 = 1.12.

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