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Question 1

Suppose that when the price of cereal increases from $3.5 to $4.3 quantity supplied increases from 220 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 $3.8, quantity supplied decreases from 260 to 220.

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

 

Hint




Question 3

Suppose that the price of peanut butter decreases from $4.4 to $3.6. As a result, quantity supplied decreases from 260 to 210.

Based on this information classify the supply curve.

 

Hint




Question 4

Consider the following supply schedule for bags.

PriceQuantity Supplied
$4419
$8431
$12443
$16455
$20467
$24479
$28491
$32503

Suppose that the price of bags increases from $8 to $12.

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

 

Hint




Question 5

Consider the following supply schedule for shoes.

PriceQuantity Supplied
$8442
$16474
$24506
$32538
$40570
$48602
$56634
$64666

Suppose that the price of shoes increases from $56 to $64.

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

 

Hint