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MA_775_DIABLO [31]
3 years ago
7

Suppose that in the market for ice cream the elasticity of supply is equal to 1.50. How would a 10% increase in the price of ice

cream affect the quantity of ice cream supplied?
Mathematics
1 answer:
Dmitriy789 [7]3 years ago
5 0

The quantity will decline by 15%.

<u>Step-by-step explanation:</u>

Elasticity of Demand = % Change in quantity / % Change in price

ð 1.50 = % change in quantity / 10

ð Percentage change in quantity = 15%

Percentage change in quantity shows an inverse relation with respect to the percentage change in price. In this case of ice-cream, a 10% jump in the price will result the quantity to fall by 15%.

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