Final answer:
The percentage change in quantity supplied of lumber based on a 20% price increase and a price elasticity of supply of 2.4 is 48%, which is calculated by multiplying the elasticity coefficient by the percentage price change.
Step-by-step explanation:
The question asks us to calculate the percentage change in quantity supplied of lumber when the price of lumber increases by 20%, given that the price elasticity of supply for lumber is 2.4. The price elasticity of supply measures how much the quantity supplied responds to a change in price. To calculate the change, we use the elasticity coefficient:
Percentage change in quantity supplied = (Elasticity of Supply) × (Percentage change in price)
Plugging in the numbers:
Percentage change in quantity supplied = 2.4 × 20%
# Percentage change in quantity supplied = 48%
Therefore, if the price of lumber increases by 20%, the quantity supplied of lumber would change by 48%.