Question on: WAEC Economics - 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.
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Correct Option: C
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
5Â Ă· 5 = 1
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