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Question 1

Suppose that when the price of cereal increases from $3.5 to $4 quantity supplied increases from 210 to 240.

Using the mid-point elasticity approach, calculate price elasticity of supply.

 

Hint




Question 2

Suppose that when the price of cereal decreases from $4 to $3.4, quantity supplied decreases from 250 to 190.

Using the mid-point elasticity approach, calculate price elasticity of supply.

 

Hint




Question 3

Suppose that the price of peanut butter decreases from $4.5 to $3.5. As a result, quantity supplied decreases from 250 to 180.

Based on this information classify the supply curve.

 

Hint




Question 4

Consider the following supply schedule for bags.

PriceQuantity Supplied
$9453
$18498
$27543
$36588
$45633
$54678
$63723
$72768

Suppose that the price of bags increases from $63 to $72.

Using the mid-point approach, calculate price elasticity of supply.

 

Hint




Question 5

Consider the following supply schedule for books.

PriceQuantity Supplied
$7419
$14433
$21447
$28461
$35475
$42489
$49503
$56517

Suppose that the price of books increases from $14 to $21.

Using the mid-point approach, calculate price elasticity of supply.

 

Hint