If a 20% change in price results in a 15% change in quantity supplied, then the price elasticity of supply is about
A) 1.33, and supply is elastic.
B) 1.33, and supply is inelastic.
C) 0.75, and supply is elastic.
D) 0.75, and supply is inelastid.

Question

Quizplus · Accepted Answer

Price elasticity of supply is calculated as the percentage change in quantity supplied divided by the percentage change in price. Here, it is 15% / 20% = 0.75, which is less than 1, indicating that supply is inelastic.

If a 20% Change in Price Results in a 15