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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