If the price elasticity of supply for a good is 0.75, then
A) the supply is elastic.
B) the supply is inelastic so the demand must also be inelastic.
C) an increase in the price boosts the quantity supplied by a larger percentage.
D) the percentage change in the quantity supplied is less than the percentage change in price.
E) None of the above answers is correct.

Question

Quizplus · Accepted Answer

The price elasticity of supply measures how much the quantity supplied of a good responds to a change in the price of that good. A value less than 1 (like 0.75) indicates that the supply is inelastic, meaning the percentage change in quantity supplied is less than the percentage change in price.

If the Price Elasticity of Supply for a Good Is