Question

Helen's Honey Hut supplies 20 jars of honey per week when the price of honey is $6 per jar and supplies 30 jars per week when the price of is $8 per jar, so the price elasticity of supply over this price range is 1.4. a. True b. False

Answer 1

False.

Explanation:

Given that,

When price of honey = $6 per jar then the supply = 20 jars of honey

When price of honey = $8 per jar then the supply = 30 jars of honey

Therefore,

Elasticity of supply:

`=(Change\ in\ quantity)/(Change\ in\ price)*(Initial\ price)/(Initial\ quantity)`

`=((30-20))/((8-6))*(6)/(20)`

`=(10)/(2)*(6)/(20)`

= 1.5

Therefore, the statement is false.