Question 48
Basic Agricultural EconomicsThe table below illustrates the supply schedule for maize.
Price (N) 24 — Quantity supplied 480 kg
Price (N) 16 — Quantity supplied 400 kg
Determine the elasticity of supply for maize.
- A.0.3
- B.0.4
- C.0.5
- D.0.6
Show the answer and explanation
Answer: C (0.5)
Explanation
Elasticity of supply = % change in quantity ÷ % change in price = 16.7 ÷ 33.3 = 0.5.