Question

Suppose that an employee at a coffee shop is willing to work 30 hours per week when she is paid $11.00 per hour. When she is offered a raise to $15.00 per hour, she is willing to work 40 hours per week. Her price elasticity of supply is . (Note: use the midpoint method and give your answer to two decimal places.)

Answer 1

Answer:

price elasticity of supply = 1.19

Explanation:

given data

work = 30 hours per week

paid = $11.00 per hour

raise = $15.00 per hour

work = 40 hours per week

solution

we get here price elasticity of supply that is

price elasticity of supply = $\frac{percentage\ change\ in\ labor}{percentage\ change\ wage}$    ...................................1

put here value and we get here price elasticity of supply

price elasticity of supply = $\frac{\frac{40-30}{(40+30)/2} }{\frac{14-11}{(14+11)/2} }$

price elasticity of supply = 1.19