Question

Section Name: Use the information in the table below to comp lasticities of supply for the ketch Dute elastic market. Show your work Ketchup Price Heinz a supplied $1.00 (million bottles) Hunts Q supplied (million bottles) 10 Ketchup Market (million bottles) (s/bottle) 20 $1.50 12 30 42 6. The elasticity of supply for Hunts ketchu. 7. Is this firm elastic, inelastic or unitary elastic? 8. The elasticity of supply for Heinz Ketchup is 9. Is this firm elastic, inelastic or unitary elastic? 10. The elasticity of supply for the entire ketchup market is

Please answer all the parts as soon as possible.

Answer 1

6)

The Arc price elasticity is given as

Arc price elasticity Ep = -

12-10 Elasticity of supply Ep = 1.50 -1.00 12 + 10 1.50 +1.00

Elasticity of supply for Hunt's ketchup = 0.4545

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7)

The firm is inelastic because the price elasticity of supply is less than one.

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8)

30 - 10 30 + 10 Elasticity of supply Ep = 1.50 -1.00 1.50 +1.00

Elasticity of supply for Heinz ketchup = 2.5

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9)

The firm is elastic because the price elasticity of supply is more than one.

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10)

42-20 42 + 20 Elasticity of supply Ep = 1.50 -1.00 1.50 + 1.00

Elasticity of supply for the entire ketchup market = 1.77