Question

When 15% increase in price of the commodity causes 10% increase in quantity supplied, then the

elasticity of supply is:

a) elastic b) inelastic c) perfectly elastic d) perfectly inelastic​

Answer 1

Answer:

hlo

Explanation:

Price Elasticity of a supply Es = (Percentage change in the quantity of supply) Qs/ (Percentage change in the price of the commodity) Ps.

Qs = 25 % since there is a change in the quanity of supply by 25 %

Ps = 50% since there is a change in the price of the quantity by 50 %

Thus, Es = 25/50 = 0.5.

Since, Es is less than 1 but not equal to 0 it is inelastic which is also the degree of price elasticity.

Answer 2

Answer:

b) inelastic

Explanation:

ep is less than one ( ep < 1 ) so it is inelastic