The price elasticity of supply is 1.2 and price increases by 3 percent. As a result,...

Question

Question

The price elasticity of supply is 1.2 and price increases by 3 percent. As a result, the quantity supplied will increase by (blank) percent.

Answer 1

Answer #1

Answer :

Price elasticity of Supply = %change in Quantity /% Change in price

Since price is increase by 3%

So % increase in supply = Price elasticity * % increase in price

% increase in supply =1.2*3%=3.6%

Answer 2

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The price elasticity of supply is 1.2 and price increases by 3 percent. As a​ result,...