The price of a good reduced by one-third and the quantity supplied reduced by two-thirds. What is the price elasticity of supply?

0.25

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0.5

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Solution

The correct option is D
2

Given that
$Δ p = \frac{p}{3} Δ q = \frac{2 q}{3} ϵ_{s} = \frac{Δ q}{Δ p} \times \frac{p}{q} = \frac{2 q}{p} \times \frac{3}{3} \times \frac{p}{q} ϵ_{s} = 2$

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The price of a good reduced by one-third and the quantity supplied reduced by two-thirds. What is the price elasticity of supply?

The correct option is D 2 Given that Δp=p3Δq=2q3ϵs=ΔqΔp×pq=2qp×33×pqϵs=2

The correct option is D
2

Given that
$Δ p = \frac{p}{3} Δ q = \frac{2 q}{3} ϵ_{s} = \frac{Δ q}{Δ p} \times \frac{p}{q} = \frac{2 q}{p} \times \frac{3}{3} \times \frac{p}{q} ϵ_{s} = 2$