question archive The George Company produces chicken feed
The George Company produces chicken feed
Subject:EconomicsPrice:2.88 Bought3
The George Company produces chicken feed. When the feed has a price of $5 per unit, it produces 20,000 units; when the price falls to $4 per unit, it produces 15,000 units.
Calculate price elasticity of supply for the chicken feed
Enter only numbers, a decimal point, and/or a negative sign as needed. Round your answer to two decimal places as necessary; if you round on intermediate steps, use four places.
With respect to price, supply of the chicken feed just discussed is relatively:
a. inelastic,
b. elastic, or
c. unit elastic
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The George Company produces chicken feed. When the feed has a price of $5 per unit, it produces 20,000 units; when the price falls to $4 per unit, it produces 15,000 units.
the price elasticity of supply for the chicken feed = Percentage change in supply / Percentage change in price
Percentage change in supply = 20000- 15000/15000 x 100 = 33.33%
Percentage change in price = 5-4/4 x100 = 25%
Price elasticity of supply = 33.33/25 = 1.32
