Question

Monthly supply of soccer tickets is given by the equation: Qs = 15,000 + 43.75P. At a price of R800, what is the price elasticity of supply?

Answer 1

Formula for point elasticity:

E = $(P/Q)*(\Delta Q/\Delta P)$ .

$\Delta Q/\Delta P$ can be found in supply formula ant it is 43.75.

With a given price of R800 we can calculate the quantity - 50,000.

E = (800/50,000)*43.75 = 0.7.

So supply is inelastic.