Suppose when the price of jean-jackets increased by 10 percent, the quantity supplied increased by 16 percent.Based on this information the price elasticity of supply of jean-jackets is
A)0.625.
B)6%.
C)1.6.
D)1.6%.

Question

Quizplus · Accepted Answer

The formula for price elasticity of supply is (% change in quantity supplied) / (% change in price). Using the information given, we can calculate the price elasticity of supply as follows:

% change in quantity supplied = 16% 
% change in price = 10%

Price elasticity of supply = (16% / 10%) = 1.6

Therefore, the correct answer is C) 1.6.

Suppose When the Price of Jean-Jackets Increased by 10 Percent