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Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383

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BuyFindarrow_forward

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383
Textbook Problem

The quantity supplied of a good rises from 120 to 140 as price rises from $4 to $5.50. What is the price elasticity of supply of the good?

To determine

The price elasticity of demand.

Explanation

Price elasticity of demand (Ed) can be calculated using the following formula:

Ed=  ΔQdQaverage ΔPPaverage (1)

Here,

ΔQd is the change in quantity demanded.

Qaverage stands for the average of the two quantities demanded.

ΔP is the change in price.

Paverage stands for the average of the two prices

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