If the elasticity of supply of TV sets is equal to 3, then a 10 per cent increase in the price of a TV will
A) decrease the quantity supplied by 30.0 per cent.
B) increase the quantity supplied by 30.0 per cent.
C) increase the quantity supplied by 3.33 per cent.
D) increase the quantity supplied by 0.33 per cent.

Question

Quizplus · Accepted Answer

The elasticity of supply measures how much the quantity supplied responds to a price change. With an elasticity of 3, a 10% increase in price leads to a 30% increase in quantity supplied (3 times the percentage change in price).

If the Elasticity of Supply of TV Sets Is Equal