If we observe that when the price of ice cream rises by 10%, ice cream manufacturers increase the quantity supplied of ice cream by 20%, then the price elasticity of supply is 2.

Question

Quizplus · Accepted Answer

The price elasticity of supply is calculated as the percentage change in quantity supplied divided by the percentage change in price. Here, a 20% increase in quantity supplied divided by a 10% increase in price gives an elasticity of 2.

If We Observe That When the Price of Ice Cream