Multiple Choice
Holding all other factors constant and using the midpoint method,if a pencil manufacturer increases production by 20 percent when the market price of pencils increases from $0.50 to $0.60,then supply is
A) inelastic,since the price elasticity of supply is equal to .91.
B) inelastic,since the price elasticity of supply is equal to 1.1.
C) elastic,since the price elasticity of supply is equal to 0.91.
D) elastic,since the price elasticity of supply is equal to 1.1.
Correct Answer:
Verified
Correct Answer:
Verified
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