The increase in quantity of lemons would also depend on the change in price, given that the price elasticity of supply is 222.
What is price elasticity?
- Price elasticity of demand measures how much a product's consumption changes in response to price changes. Price elasticity is a tool used by economists to analyze how supply and demand for a product fluctuate in response to price changes.
- The pricing of some items are particularly inelastic, according to economists.
- In other words, neither a price decrease nor an increase in price significantly affect demand.
- For instance, the price-elasticity of demand for gasoline is low. Drivers, as well as airlines, the trucking industry, and practically every other buyer, will continue to make as many purchases as necessary.
Mathematically expressed, Price Elasticity of Demand = Percentage Change in Quantity Demanded / Percentage Change in Price.
Therefore, The increase in quantity of lemons would also depend on the change in price.
Know more about the Price Elasticity with the help of the given link:
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