Economics Today and Tomorrow, Student Edition
1st Edition
ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter5: Buying The Necessities
Section: Chapter Questions
Problem 20AA
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The percentage change in the quantity supplied in the economy is divided by the percentage change in the price. The economy was producing and supplying 50 units at a price of $5 per unit. The increase in the quantity from 5 to 8 makes the quantity supplied equal to 130. Thus, the elasticity of supply can be calculated as follows:
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