When the price of canned pickle juice increased $50 \%$, the quantity supplied of pickle juice increased $40 \%$.

What is the price elasticity of supply, and how is that value interpreted?

Choose 1 answer:
(A) 0.10 ; inelastic
(B) 1.25 ; elastic
(C) 0.10 ; unit elastic
(D) 0.8 ; elastic
(E) 0.8 ; inelastic

Question

When the price of canned pickle juice increased $50 \%$, the quantity supplied of pickle juice increased $40 \%$.

What is the price elasticity of supply, and how is that value interpreted?

Choose 1 answer:
(A) 0.10 ; inelastic
(B) 1.25 ; elastic
(C) 0.10 ; unit elastic
(D) 0.8 ; elastic
(E) 0.8 ; inelastic

Accepted Answer

∻Solution∻ ‖ a ⋮ Price Elasticity of Supply Formula: The price elasticity of supply (PES) is calculated using the formula $PES = \frac{\% ext{ change in quantity supplied}}{\% ext{ change in price}}$. ‖ ‖ b ⋮ Calculating PES: Given that the price of canned pickle juice increased by $50\%$ and the quantity supplied increased by $40\%$, we use the formula to find $PES = \frac{40\%}{50\%} = 0.8$. ‖ ∻Answer∻ ⚹ (E) 0.8 ; inelastic ⚹ ∻Key Concept∻ ⚹ Price Elasticity of Supply (PES) ⚹ ∻Explanation∻ ⚹ PES measures how much the quantity supplied responds to a change in price. A PES less than 1 indicates that the supply is inelastic, meaning producers are not very responsive to price changes. ⚹◊What is the formula for calculating price elasticity of supply in this scenario?⍭ Generate me a similar question◊

Sia