Use the following to answer questions :
Figure 4-1
-The price elasticity of supply shown in Figure 4-1 between points A and B is:
A).1.
B).5.
C)1.
D)5.
E)none of the above.

Question

Use the following to answer questions :
Figure 4-1 
-The price elasticity of supply shown in Figure 4-1 between points A and B is:
A).1. 
B).5. 
C)1. 
D)5. 
E)none of the above.

Quizplus · Accepted Answer

The price elasticity of supply is the percentage change in quantity supplied divided by the percentage change in price. Between points A and B, the quantity supplied increases by 100% and the price increases by 50%. Therefore, the price elasticity of supply is 100% / 50% = 2.

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