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Solution Given, Es=0.8 Percentage change in price = 50% Price elasticity of supply Es=Percentage change in quantity suppliedPercentage change in price 0.8=Percentage change in quantity supplied50 Percentage change in quantity supplied = 0.8×50 Percentage change in quantity supplied = 40%What does 0.8 price elasticity of demand mean?The price elasticity of -0.8 implies that the demand is inelastic. Usually, when the demand is inelastic, price and revenue are positively correlated. That is, a rise in price causes the revenue to rise, and a decline in price cause the revenue to fall.
What is price elasticity of demand if a 2% increase in price results in a 6 decrease in quantity demanded?Suppose that a 2% increase in price results in a 6% decrease in quantity demanded. Own-price elasticity of demand is equal to: a) 1/3.
What is the price elasticity of supply when price rises from $15 to $20?The following data relate to the supply schedule of a product. Using the regular percentage change formula, what is the price elasticity of supply when price increases from $15 to $20? zero.
What happens to elasticity of supply when price increases?Price elasticity of supply measures the responsiveness to the supply of a good or service after a change in its market price. According to basic economic theory, the supply of a good will increase when its price rises. Conversely, the supply of a good will decrease when its price decreases.
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If the price elasticity of supply is 0.8 and price increased by 21 percent quantity supplied would
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