Question #107643

when the price of a jar of jelly decreased from $4 to $2, suppliers of jelly decreased production from 250,000 jars to 150,000 jars. What is the price elasticity of supply in this case? What is the interpretation of the estimated elasticity?

Expert's answer

(150-250)/((150+250)/2)÷(2-4)/((2+4)/2)=-1/2÷(-2/3)=3/4=0.75 The supplu is not price elastic


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Canada #340153 on Dec 2023