question archive The price of cell phones rose slightly higher from $500
The price of cell phones rose slightly higher from $500
Subject:EconomicsPrice:2.88 Bought3
The price of cell phones rose slightly higher from $500.00 to $550.00 this past month. Samsung found out about Apple's release of the iPhone X, so in turn it decided to increase production of its Galaxy S8 from 150,000 to 300,000 to compete with its rival. What is the price elasticity of supply for Galaxy S8 phones?
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Mathematically,
The price elasticity of supply = Percentage change in quantity supplied/Percentage change in price
Percentage change in quantity supplied = (300,000 - 150,000) / (150,000) x 100
Percentage change in quantity supplied = 100
Percentage change in price = (550 - 500) / 500 x 100
Percentage change in price = 10%
Therefore, the price elasticity of supply = 100/10 which is 10.
