If the price of an item changes by 8% and quantity supplied changes from 600 units to 660 units, the price elasticity of supply is

victoria.o

7 years ago

%change in qd/%change in price=660-600 /600=1/10%=10/8=1.25(B)

Puno

4 years ago

Elasticity is the degree of responsiveness in quantity demanded/supplied to the degree of change in price of a commodity. It is measured by (%change in qty dd/ss) / (%change in price)

here, we are dealing with supply and by percentage, the change in supply is 10% as against the 8% of price. So, the answer is 10/8= 1.25... B

allbadoo

9 years ago

who can epp with this one?