A market supply curve has three prices $4.50, $5.00 and $5.50 with a quantity supplied of 7
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Question:
A market supply curve has three prices $4.50, $5.00 and $5.50 with a quantity supplied of 7 tonnes at the price of $4.50, 9 tonnes at $5.00, and 11 tonnes at $5.50.
a. Is this supply curve a straight line?
b. What is the price elasticity of supply, es, between prices $4.50 and $5.00 and between prices $5.00 and $5.50? Do not round your interim calculations before obtaining the final solution (i.e. do not clear your calculator).The price elasticity of supply is between prices $4.50 and $5.00, and is between prices $5.00 and $5.50.
c. Based on your answers to must a supply curve with a constant slope have a constant numerical elasticity?
Related Book For
Macroeconomics Principles, Applications, and Tools
ISBN: 978-0132555234
7th Edition
Authors: Arthur O Sullivan, Steven M. Sheffrin, Stephen J. Perez
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