If a 5 percent increase in price leads to a 3 percent increase in quantity supplied, the elasticity of supply is

Unlock all questions

This demo includes only 20 questions. Upgrade to access hundreds of questions, flashcards, exam simulations, and disable ads.

Full question bankExam simulationsFlashcards

From $9.99Unlock all

Maximize your understanding of demand and supply elasticities with a comprehensive test. Challenge yourself with insightful questions and detailed explanations to enhance your preparation.

Multiple Choice

If a 5 percent increase in price leads to a 3 percent increase in quantity supplied, the elasticity of supply is

Elasticity of supply shows how much quantity supplied responds to a price change. It’s calculated as the percentage change in quantity supplied divided by the percentage change in price. Here, quantity supplied rises 3% when price rises 5%, so PES = 3% / 5% = 0.60. Since this elasticity is less than 1, the supply is inelastic in this range—the quantity supplied increases, but not as much as the price does.

If a 5 percent increase in price leads to a 3 percent increase in quantity supplied, the elasticity of supply is

Maximize your understanding of demand and supply elasticities with a comprehensive test. Challenge yourself with insightful questions and detailed explanations to enhance your preparation.

If a 5 percent increase in price leads to a 3 percent increase in quantity supplied, the elasticity of supply is

Get the latest from Examzify