Final answer:
The price elasticity of supply value of 3.75 at Quinn's Cupcake shop indicates an elastic supply, meaning a 1% increase in price results in a 3.75% increase in quantity supplied.
Step-by-step explanation:
Quinn's Cupcake Shop has a price elasticity of supply of 3.75, which provides significant information about how the quantity supplied reacts to price changes. An elasticity value greater than 1 indicates that the supply is elastic. This means that for every 1% increase in price, the quantity supplied increases by 3.75%. To provide an example, if we consider a scenario where the supply curve is elastic, like moving from point L to point M where the price rises from $10 to $11 (a 10% increase) and the quantity supplied (Qs) rises from 80 to 88 (a 10% increase), we can see that the percentage change in quantity supplied is directly proportional to the percentage change in price, but at a greater magnitude given the elasticity value. Hence, Quinn's Cupcake Shop would significantly increase its cupcake supply in response to a price increase.