The elasticity of supply coefficient for lobster is estimated to be equal to 0.6.It is expected, therefore, that a 10% decrease in price would lead to:
A)a 6% decrease in the quantity of lobsters supplied.
B)a 6% increase in the quantity of lobsters supplied.
C)a 10% decrease in the quantity of lobsters supplied.
D)a 10% increase in the quantity of lobsters supplied.
E)a 0.6% increase in the quantity of lobsters supplied.

Question

Quizplus · Accepted Answer

The elasticity of supply coefficient of 0.6 means that for every 1% change in price, the quantity supplied changes by 0.6%. Therefore, a 10% decrease in price would lead to a 6% decrease in the quantity supplied.

The Elasticity of Supply Coefficient for Lobster Is Estimated to Be