as the price of maple syrup increased from $6 per pint to $7 per pint, productio

Question

as the price of maple syrup increased from $6 per pint to $7 per pint, production increased from 250 pints to 300 points. What is the elasticity of supply over this range? Is supply elastic or inelastic over this range? as the price of maple syrup increased from $6 per pint to $7 per pint, production increased from 250 pints to 300 points. What is the elasticity of supply over this range? Is supply elastic or inelastic over this range? as the price of maple syrup increased from $6 per pint to $7 per pint, production increased from 250 pints to 300 points. What is the elasticity of supply over this range? Is supply elastic or inelastic over this range?

Explanation / Answer

Price elasticity of Supply = (% Change in Quantity Supplied) / (% Change in Price)

The formula used to calculate the percentage change in quantity supplied is:

[QSupply(NEW) - QSupply(OLD)] / QSupply(OLD)

300-250 / 250 = 0.2

the formula used to calculate the percentage change in price is:

[Price(NEW) - Price(OLD)] / Price(OLD)

7-6 / 6 = 0.16

Therefore, 0.2 / 0.16 = 1.25

Here price elasticity is greater than 1 so , it is elastic.

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