Using the midpoint method, the price elasticity of supply when the price falls from $2 to $1 is ____ and this is considered to be ____. | Price | Quantity Supplied | | :--- | :--- | | $0 | 0 | | $1 | 45 | | $2 | 100 | | $3 | 160 | | $4 | 225 | a) 0.28; inelastic b) 1.14; elastic c) 0.51; elastic d) 0.35; inelastic
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The formula for the percentage change in quantity supplied is: (Q2 - Q1) / [(Q2 + Q1) / 2] where Q1 is the initial quantity supplied and Q2 is the final quantity supplied. Substituting the given values, we get: (45 - 100) / [(45 + 100) / 2] = -55 / 72.5 = Show more…
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