Suppose that the value of the price of a product decreased from $2.10 to $1.90,and the quantity supplied decreased from 24 to 16.What is the value of supply elasticity?

Question

Quizplus · Accepted Answer

Supply elasticity is calculated as the percentage change in quantity supplied divided by the percentage change in price. The percentage change in quantity is ((16-24)/24)*100 = -33.33%, and the percentage change in price is ((1.90-2.10)/2.10)*100 = -9.52%. The elasticity is -33.33% / -9.52% = +3.5, which is closest to +4.0.

Suppose That the Value of the Price of a Product