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Question 1

Suppose that when the price of peanut butter increases from $3.6 to $4.1 quantity supplied increases from 220 to 260.

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

 

Suppose that when the price of cereal decreases from $4.4 to $3.7, quantity supplied decreases from 260 to 180.

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

 

Suppose that the price of cereal decreases from $4.3 to $3.7. As a result, quantity supplied decreases from 240 to 200.

Based on this information classify the supply curve.

 

Consider the following supply schedule for shoes.

PriceQuantity Supplied
$7428
$14449
$21470
$28491
$35512
$42533
$49554
$56575

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

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

 

Consider the following supply schedule for books.

PriceQuantity Supplied
$9445
$18490
$27535
$36580
$45625
$54670
$63715
$72760

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

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

 


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