Suppose the price elasticity of supply for poker chips is .7 and the price decreases by 30%.The quantity supplied will decrease by ________ %.
A)25
B)30
C)15
D)21

Question

Quizplus · Accepted Answer

The price elasticity of supply is 0.7, meaning a 1% decrease in price results in a 0.7% decrease in quantity supplied. Therefore, a 30% decrease in price results in a 30% * 0.7 = 21% decrease in quantity supplied.

Suppose the Price Elasticity of Supply for Poker Chips Is