question archive A 40% increase in price led the quantity supplied of bicycles in a competitive market to increase from 300
A 40% increase in price led the quantity supplied of bicycles in a competitive market to increase from 300
Subject:EconomicsPrice:2.88 Bought3
A 40% increase in price led the quantity supplied of bicycles in a competitive market to increase from 300.00 to 330.00. What is the price elasticity of supply for bicycles?
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The price elasticity of supply is the percentage change in quantity supplied divided by the percentage change in price. The percentage change in quantity supplied is:
- (330 - 300) / 300 = 10%
Thus the price elasticity of supplied is:
- 10% / 40% = 0.25
