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A manufacturer produces 350 units when the market price is $10 per unit and produces 460 units when the market price is $14 per unit. Using the midpoint method, for this range of prices, the price elasticity of supply is about Group of answer choices

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Tundexi

Answer:

0.75

Explanation:

Price elasticity of supply = Percentage change in quantity supplied/%change in price

=> Percentage change in quantity supplied = (Q2 - Q1) / (Q2+Q1)/2 = (450-350) / ((450+350)/2) = 100 / 400 =

=> Percentage change in price = (P2 - P1)/(P2+P1)/2 = (14-10) / ((14+10)/2) = 4/12

Price elasticity of supply = 0.25 / (4/12)

Price elasticity of supply = 0.25 * 12 / 4

Price elasticity of supply = 3/4

Price elasticity of supply = 0.75

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