If for a particular market a drop in price from $100 to $50 causes quantity supplied to decrease from million to 2 million units we can say that supply: is elastic is inelastic is perfectly inelastic is perfectly elastic has a price elasticity whose numerical value is exactly equal to one
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Step 1: Calculate the percentage change in price: Percentage change in price = ((New price - Old price) / Old price) x 100 Percentage change in price = (($50 - $100) / $100) x 100 Percentage change in price = (-$50 / $100) x 100 Percentage change in price = -50% Show more…
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