From the table above, Calculate the price elasticity of supply
The elasticity of supply = % change in quantity supplied /%change in price
First, we calculate the individual change in supply and price. hence we have:
For supply we have: ∆Qs/Old Qs x 100
=(24 - 20 )/20 x 100 =4/20 x 100 =20%
For price we have: ∆P/Old price x 100 =(10 - 8 )/8 x 100 =2/8 x 100 =25%
%∆Qs/%∆price =20/25 =0.8
