Use the midpoint method for calculating all elasticity measures below Suppose that the price of apples increases by 10%. Within a short amount of time, apple producers are able to increase the quantity of apples supplied by 2%. The higher price has made it worthwhile to use extra labor to reduce waste and spoilage. Is this short run adjustment showing elastic or inelastic supply? Explain. Now assume that over a 10 year period of time the overall quantity of apples has grown from 11,000 pounds to 13,000 pounds. Now recalculate the price elasticity of supply for this longer period of time and explain the difference between elasticity of supply in the short run and in the long run

Answer: Given, Short-run data: Percenatge change in price=10%Percenatge change in quantity…

Answered: Use the midpoint method for calculating…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Use the midpoint method for calculating all elasticity measures below

Suppose that the price of apples increases by 10%. Within a short amount of time, apple producers are able to increase the quantity of apples supplied by 2%. The higher price has made it worthwhile to use extra labor to reduce waste and spoilage. Is this short run adjustment showing elastic or inelastic supply? Explain.

Now assume that over a 10 year period of time the overall quantity of apples has grown from 11,000 pounds to 13,000 pounds. Now recalculate the price elasticity of supply for this longer period of time and explain the difference between elasticity of supply in the short run and in the long run

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