Use the midpoint formula for calculating elasticity to calculate the price elasticity of supply between point A and point B for each panel of Figure 6.6.

Data given in Figure 6.6

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Price (dollars per hour) $4.00 2.00 0 2. causes a large increase in price. A Supply Inelastic B 1. With inelastic supply, an increase in demand... Demand July 4 Demand Typical 1,200 1,400 (a) Price increases more when supply is inelastic. Quantity (spaces per hour) Price (dollars per hour) $2.50 2.00 0 2. ... causes a small increase in price. 1. With elastic supply, an increase in demand ... A 1,200 B Supply Elastic Demand July 4 Demand Typical 2,100 Quantity (spaces per hour) (b) Price increases less when supply is elastic.