If the price elasticity of supply for a product is 5,and prices increase 10 percent,then supply will _____
A)increase by 5 percent.
B)increase by 10 percent.
C)increase by 50 percent.
D)decrease by 50 percent.
E)decrease by 3 percent.

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. With an elasticity of 5, a 10 percent increase in price leads to a 5 * 10% = 50% increase in supply.

If the Price Elasticity of Supply for a Product Is