Get the answers you need at Westonci.ca, where our expert community is dedicated to providing you with accurate information. Get expert answers to your questions quickly and accurately from our dedicated community of professionals. Experience the convenience of finding accurate answers to your questions from knowledgeable experts on our platform.
Sagot :
Answer:
Elasticity of supply for dog food = 0.95
Explanation:
From the question, we have:
New quantity supplied of dog food = 107.0
Old quantity supplied of dog food = Initial equilibrium quantity = 21.0
New price = $8.75
Old price = Initial equilibrium price = $1.50
Generally, the formula for calculating the elasticity of supply is as
follows:
Elasticity of supply = Percentage change in quantity supplied / Percentage change in price ................ (1)
Where, based on the midpoint formula, we have:
Percentage change in quantity supplied of dog food = {(New quantity supplied of dog food - Old quantity supplied of dog food) / [(New quantity supplied of dog food + Old quantity supplied of dog food) / 2]} * 100 = {(107.0 - 21.0) / [(107.0 + 21.0) / 2]} * 100 = 134.375%
Percentage change in price = {(New price - Old price) / [(New price + Old price) / 2]} * 100 = {(8.75 - 1.50) / [(8.75 + 1.50) / 2]} * 100 = 141.463414634146%
Substituting the values into equation (1), we have:
Elasticity of supply for dog food = 134.375% / 141.463414634146% = 0.94989224137931
Approximated to 2 decimal places, we have:
Elasticity of supply for dog food = 0.95
We appreciate your visit. Hopefully, the answers you found were beneficial. Don't hesitate to come back for more information. Thanks for using our service. We're always here to provide accurate and up-to-date answers to all your queries. Get the answers you need at Westonci.ca. Stay informed by returning for our latest expert advice.
