Asked by
RUSHI MEHTA
on Oct 08, 2024
Verified
Suppose that the price of product X rises by 20 percent and the quantity supplied of X increases by 15 percent.The coefficient of price elasticity of supply for good X is:
A) negative and therefore X is an inferior good.
B) positive and therefore X is a normal good.
C) less than 1 and therefore supply is inelastic.
D) more than 1 and therefore supply is elastic.
Coefficient
A numerical or constant factor in a mathematical expression that multiplies the variable it is associated with.
Price Elasticity
The measure of how much the quantity demanded of a good responds to a change in the price of that good, indicating the sensitivity of demand to price changes.
- Gain an understanding of the theory behind price elasticity in supply and demand contexts.
- Compare and contrast elastic, inelastic, and unitary supply and demand.
Verified Answer
JG
Learning Objectives
- Gain an understanding of the theory behind price elasticity in supply and demand contexts.
- Compare and contrast elastic, inelastic, and unitary supply and demand.