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1 year ago

The price elasticity of supply is0.9 , and price increases by10 percent. As a result, the quantity supplied will increase by

Business

1 answer:

Darya [45]1 year ago

6 0

When price increases by 10 percent, the quantity supplied increases by nine percent.

<h3>What is the percentage increase in the quantity supplied?</h3>

Price elasticity of supply measures the responsiveness of quantity supplied to changes in price of the good. Price and quantity supplied have a positive relationship.

If the value of the price elasticity of supply is less than one, it means that supply in inelastic. Supply is inelastic if a small change in price has little or no effect on quantity supplied.

Price elasticity of supply = percentage change in quantity supplied / percentage change in price

percentage change in quantity supplied = percentage change in price X price elasticity of supply

0.9 x 10 = 9%

To learn more about supply elasticity, please check: brainly.com/question/26634801

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Metropolis National Bank is holding 2% of its deposits as excess reserves. Assume that no banks in the economy want to maintain

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Answer:

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Explanation:

Note: The given question is incomplete, missing part is as follow:

Metropolis National Bank

Balance sheet

Assets Liabilities

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<u> Loans $440,000 </u>

Computation:

Excess reserve hold = 2% × Deposits

Excess reserve hold = 2% × $500,000

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Required reserve = $60,000 - $10,000

Required reserve = $50,000

So,

Required reserve ratio = [$50,000 / $500,000]100 = 10%

Multiplier(K) = 1 / Required reserve ratio

Multiplier(K) = 1 / 10%

Multiplier(K) = 10

Total Money = Person deposit + Excess reserve hold

Total Money = $10,000 + $10,000

Total Money = $20,000

Increase in money supply = Total Money × Multiplier(K)

Increase in money supply = $20,000<u> </u> × 10

Increase in money supply = $200,000

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3 years ago

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4 years ago

The price elasticity of supply is0.9 ​, and price increases by10 percent. As a​ result, the quantity supplied will increase by

The price elasticity of supply is0.9 , and price increases by10 percent. As a result, the quantity supplied will increase by