If the price elasticity of supply is 0.5, when prices rise by 10%, the quantity supplied will
Part 2
A.
increase by 0.50% and the supply is considered elastic.
B.
decrease by 2.00% and the supply is considered inelastic.
C.
increase by 5.0% and the supply is considered inelastic.
D.
decrease by 5.0% and the supply is considered elastic.

Question

If the price elasticity of supply is 0.5​, when prices rise by 10​%, the quantity supplied will
Part 2
A.
increase by 0.50​% and the supply is considered elastic.
B.
decrease by 2.00​% and the supply is considered inelastic.
C.
increase by 5.0​% and the supply is considered inelastic.
D.
decrease by 5.0​% and the supply is considered elastic.

Accepted Answer

***C*** ∻Key Concept∻ ⚹Price Elasticity of Supply⚹ ∻Explanation∻ ⚹Price elasticity of supply measures the responsiveness of the quantity supplied to a change in price. It is calculated as the percentage change in quantity supplied divided by the percentage change in price. In this case, with a price elasticity of supply of 0.5, a 10% increase in price will result in a 5% increase in quantity supplied, indicating that the supply is inelastic.⚹◊What is the formula for calculating price elasticity of supply in Microe⍭ Generate me a similar question◊

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