Find out price elasticity of supply when 20% change in price of the commodity results change in supply 40%.

Question

asked Dec 13, 2024 197k views

1 Answer

Sisimh · Answer 1 · 2024-12-20T02:34:34+0000

Answer:the price elasticity of supply in this scenario is 2.

Explanation:

Price Elasticity of Supply = (% Change in Quantity Supplied) / (% Change in Price)

In this case, we are given that there is a 20% change in price, resulting in a 40% change in supply. Let's plug these values into the formula:

Price Elasticity of Supply = (40% / 20%) = 2

Therefore, the price elasticity of supply in this scenario is 2.