Question #105644
Dell has gone through some market challenges these past few years, especially with the desktop market. If the prices of desktop computers decreased by 14% last quarter resulting in an increase of 12% in quantity demanded, then Dell will decrease the quantity supplied of desktops by 10%. What is the price elasticity of supply for Dell desktops?
Expert's answer
The price elasticity of supply for Dell desktops is: Es = 10%/14% = 0.714, so the supply is inelastic.
