NARRBEGIN: Exhibit 5-20
Exhibit 5-20

-What is the price elasticity of supply between $20 and $40 on supply curve S' in Exhibit 5-20?
A) 0
B) infinity
C) 1
D) 2
E) 10

Question

NARRBEGIN: Exhibit 5-20
Exhibit 5-20
 
-What is the price elasticity of supply between $20 and $40 on supply curve S' in Exhibit 5-20?
A) 0 
B) infinity 
C) 1 
D) 2 
E) 10

Quizplus · Accepted Answer

The price elasticity of supply is calculated as the percentage change in quantity supplied divided by the percentage change in price. If the supply curve S' is linear and passes through the origin, the elasticity is 1.

NARRBEGIN: Exhibit 5-20 Exhibit 5-20