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dimaraw [331]
3 years ago
15

At a price of $1.00, a local coffee shop is willing to supply 100 cinnamon rolls per day. At a price of $1.20, the coffee shop w

ould be willing to supply 150 cinnamon rolls per day. Using the midpoint method, the price elasticity of supply is about:______.
a. 2.20
b. 0.90
c. 1.11
d. 0.45
Business
2 answers:
DiKsa [7]3 years ago
7 0
<h3>Answer:</h3>

At a price of $1.00, a local coffee shop is willing to supply 100 cinnamon rolls per day. At a price of $1.20, the coffee shop would be willing to supply 150 cinnamon rolls per day. Using the midpoint method, the price elasticity of supply is about:______.

<h3><em><u>A</u></em><em><u>. 2.20 </u></em></h3>

B. 0.90

C. 1.11

D. 0.45

-<em>KeonLee</em><em> </em>

<em>I hope</em><em> </em><em>it help</em><em> </em>

<em>#Carry</em><em> </em><em>on learning</em><em> </em>

kykrilka [37]3 years ago
5 0

Answer:

a. 2.20

Explanation:

The computation of the price elasticity of supply is shown below;

Here,

P1 = $1 Q1 = 100

P2 = $1.20 Q2 = 150

We know that  

Price elasticity  = percentage change in quantity supplied ÷ percentage     change in price

where  

Percentage change in quantity supplied = (Q2-Q1)÷(Q2+Q1) ÷ 2)×100

= (150-100) ÷(150+100) ÷ 2)×100

= 40

And,  

Percentage change in price is

= (P2-P1) ÷ (P2+P1) ÷ 2)×100

= ($1.20 - $1) ÷ ($1.20 + $1) ÷ 2)×100

= 18.1818

So, price elasticity of supply is

= 40 ÷ 18.1818

= 2.20

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