Question

Calculate the price elasticity of supply for Bobbie's Bakery's sourdough loaf. When the price changes by 23 % 23% , the quantity supplied changes by 53 % 53% . Round your answer to two decimal places.

Answer 1

Answer:

Price Elasticity of Supply = 2.40

Explanation:

Price Elasticity of Supply is buyers' responsive change in quantity supplied due to change in Price.

P Es Formula = % change in quantity supplied / % change in price.

Given : % change in supply = 53 ; % change in price = 23

So, P Es = 53 / 23 = 2.40  

% change in supply > % change in price & supply is > 1 . So, Supply is Elastic.