The price elasticity of supply for tomatoes in this case is approximately 0.833.
To calculate the price elasticity of supply, we need to use the formula:
Price Elasticity of Supply = Percentage Change in Quantity Supplied / Percentage Change in Price
Given that the price of tomatoes changed from P15 to P12, and the farmer's supply reduced from 6 boxes to 5 boxes a week, we can calculate the percentage changes in quantity supplied and price.
Percentage Change in Quantity Supplied:
[(5 - 6) / 6] * 100 = -16.67%
Percentage Change in Price:
[(12 - 15) / 15] * 100 = -20%
Now, let's plug these values into the formula to calculate the price elasticity of supply:
Price Elasticity of Supply = (-16.67% / -20%)
The negative signs indicate the inverse relationship between price and quantity supplied, meaning that as the price decreases, the quantity supplied also decreases.
Simplifying the expression:
Price Elasticity of Supply ≈ 0.833
Therefore, the price elasticity of supply for tomatoes in this case is approximately 0.833.
Learn more about elasticity here: