Question

For a good, price increases by 25% and quantity supplied increases by 50%. What is the supply elasticity?

• A. 0.5
• B. 1
• C. 2
• D. 4

Answer 1

The correct option is C

2

${ϵ}_s=\frac{\text{\% change in quantity}}{\text{\% change in price}}=\frac{50}{25}=2$