The table below shows the supply schedule for children\'s books. Supply of Child
ID: 1140393 • Letter: T
Question
The table below shows the supply schedule for children's books. Supply of Children's Books (dol1ars) Quantity (books) $12 10 8 6 4 24 20 16 12 0.11 points Skipped Print Instructions: Round your answers to two decimal places a. Using the midpoint method, what is the percentage change in price from a price of $2 to a price of $4 per children's book? b. Using the midpoint method, what is the percentage change in quantity from a price of $2 to a price of $4 per children's book? c.Using the midpoint method, what is the price elasticity of supply from a price of $2 to a price of $4 per children's book?Explanation / Answer
Answer
a) Using mid point method % change in X = ((X2 - X1)/((X1 + X2)/2))*100 or
Using above formula, Percentage change in Price Using Mid point Method = ((4 - 2)/((4 + 2)/2))*100
= (2/3)*100 = 66.67%
Percentage change in Price Using Mid point Method = 66.67%
b) From Table above, When P = 2 Quantity of books supplied = 4 and When P = $4 Quantity of books supplied = 8,
Percentage change in Quantity Using Mid point Method = ((8 - 4)/((8 + 4)/2))*100
= (4/6)*100 = 66.67%
Percentage change in Quantity Using Mid point Method = 66.67%
c) Price Elasticity of Supply using mid point method = Percentage change in Quantity Supplied/ Percentage change in Quantity
Hence From Part (a) and (b)
Price Elasticity of Supply using mid point method = 66.67/66.67 = 1
Hence Price Elasticity of Supply = 1
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