An increase in the price of a commodity from $10 to $ 15 leads to
ECONOMICS
WAEC 2014
An increase in the price of a commodity from $10 to $ 15 leads to an increase in the quantity supplied from 10 units to 15 units. The price elasticity of supply is
- A. 0
- B. 0.5
- C. 1
- D. 5
Correct Answer: C. 1
Explanation
The price elasticity of supply = % change in quantity supplied / % change in price. When calculating the price elasticity of supply, economists determine whether the quantity supplied of a good is elastic or inelastic.
change in price = 10 - 15 = 5 change in quantity = 10 - 15 = 5 5
Post an Explanation Or Report an Error
If you see any wrong question or answer, please leave a comment below and we'll take a look. If you doubt why the selected answer is correct or need additional more details? Please drop a comment or Contact us directly. Your email address will not be published. Required fields are marked *