On a certain supply curve,one point is (quantity supplied = 200,price = $2.00)and another point is (quantity supplied = 250,price = $2.50).Using the midpoint method,the price elasticity of supply is about
A)0.2.
B)0.5.
C)1.0.
D)2.5.

Question

Quizplus · Accepted Answer

The midpoint method formula for price elasticity of supply is [(Q2 - Q1) / ((Q2 + Q1)/2)] / [(P2 - P1) / ((P2 + P1)/2)]. Plugging in the values: [(250 - 200) / (250 + 200)/2] / [(2.50 - 2.00) / (2.50 + 2.00)/2] = 1.0.

On a Certain Supply Curve,one Point Is (Quantity Supplied =