The price elasticity of supply of .5 is called__________________? A 5% price inc

Question

The price elasticity of supply of .5 is called__________________? A 5% price increase will [increase or decrease) quantity supplied by________________? A supply curve with an infinite elasticity coefficient is drawn Describe the type of market for a good compiling a -.5 demand elasticity and a .5 supply coefficient. Would the above market be a likely candidate for a price floor and ceiling? Why? What factors reduce the price elasticity' of demand? Price increases from $2 to $3 and the quantity supplied increased by 50%. The supply elasticity is_______________? Write the formulas for both price elasticity of demand and slope of demand.

Explanation / Answer

ans 9 inelastic supply , will increae quantity suppplied by 2.5%

Es= % change in quantity supplied/ % change in price

0.5 = % change in quantity supplied/ 5

% change in quantity supplied= 2.5%

ans 10

supply curve with infinite elasticity is horizontal line at price parallel to x-axis

ans 14

Es= % change in quantity supplied/ % change in price

Es = 50 / (3-2)*100/2

Es = 50/ 50 =1

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