A rise in the price of cabbage from $14 to $18 per bushel increases the quantity supplied from 4,000 to 6,000 bushels. The elasticity of supply is
A) 0.6.
B) 0.8.
C) 1.0.
D) 1.6.

Question

Quizplus · Accepted Answer

The elasticity of supply is calculated using the formula: (percentage change in quantity supplied) / (percentage change in price). The percentage change in quantity supplied is ((6000 - 4000) / 4000) * 100 = 50%. The percentage change in price is ((18 - 14) / 14) * 100 = 28.57%. Elasticity of supply = 50% / 28.57% ≈ 1.75, which is closest to 1.6.

A Rise in the Price of Cabbage from $14 to $18