If the price elasticity of supply of television sets is constant and equal to 3, a 10 percent increase in price will result in a change in quantity supplied equal to
A) 3 1/3 percent.
B) 30 percent.
C) 1/3 percent.
D) -30 percent.

Question

Quizplus · Accepted Answer

A price elasticity of supply of 3 indicates that for every 1% increase in price, the quantity supplied will increase by 3%. Therefore, a 10% increase in price will result in a 30% increase in quantity supplied.

If the Price Elasticity of Supply of Television Sets Is