Question 14
ElasticityA seller increased the quantity he offered for sale from 200 units to 250 units when price of his product increased by 12.5%. What is the price elasticity of supply of his product?
- A.2.00
- B.1.50
- C.1.00
- D.0.50
Show the answer and explanation
Answer: A (2.00)
Explanation
% change in quantity = 50/200 × 100 = 25%; Es = 25 ÷ 12.5 = 2.