**Question 16:**The supply of product X is elastic if the price of X rises by:**Multiple Choice:**- ○ 4 percent and quantity supplied rises by 6 percent.- ○ 7 percent and quantity supplied rises by 7 percent.- ○ 12 percent and quantity supplied remains the same.- ○ 5 percent and quantity supplied rises by 2 percent.**Explanation:**This multiple-choice question explores the concept of elasticity of supply. Elasticity of supply measures how responsive the quantity supplied of a product is to a change in its price. The supply is considered elastic when the percentage change in quantity supplied is greater than the percentage change in price. Inelastic supply would mean the quantity supplied changes less than the price change. The choices given provide different scenarios of price changes and corresponding changes in quantity supplied, requiring the identification of an elastic supply situation.

Answer: option a (4 percent and quantity supplied rises by 6 percent) Explanation: If the percentage…

Answered: The supply of product X is elastic if…

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter19: Elasticity

Section: Chapter Questions

Problem 11QP

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Suppose that when price is 10, quantity supplied is 20 units, and when the price is 6, the quantity supplied is 12 units. What is the price elasticity of supply? a. 0.5 b. 0.8 c. 1.0 d. 1.5
Consider the following supply schedule: What is the price elasticity of supply between a. P = 10 and P = 8? b. P = 8 and P = 6? c. P = 6 and P = 4? d. P = 4 and P = 2? e. P = 2 and P = 0?
(Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of Si per unit. A reduction in price to $0.20 results in an increase in quantity demanded to 70 units. Using the midpoint formula, show that these data yield a price elasticity of 0.25. By what percentage would a 10 percent rise in the price reduce the quantity demanded, assuming price elasticity remains constant along the demand curve?
1 (i) Calculate the elasticity of demand for the demand curve p = 100 − 2q at each of the following price and quantity levels and determine the type of elasticity:a. p = 90 and q = 2 b. p = 50 and q = 10 c. p = 5 and q = 19 (ii) Suppose you are given the following information: Qs = 200 + 3P Qd = 400 – P where Qs is the quantity supplied, Qd is the quantity demanded and P is price. From this information compute equilibrium price and quantity. (ii) Now suppose that a tax is placed on buyers so that Qd = 400 – (2P + T) where T is taxes. If T = 20, calculate for the newequilibrium price and quantity. (Note: You are solving for the equilibrium price for sellers and buyers).
True or False: Suppose you are advising the Dairy Farmers of Canada on changes in the milk market. Suppose the current price is $4.5 per gallon of milk and the quantity demanded is 2.5 million gallons of milk per day. Suppose price elasticity of demand is constant at 0.7. You are considering reducing the supply, so that the price rises to $5 per gallon. Total expenditure on milk by consumers will rise.
Suppose that the elasticity of supply of snow blowers is 2.3. If the price of snow blowers rises 5.5 percent, the quantity supplied of snow blowers would change by ______________ percent
Find the price for good Z and the quantity supply for good X (show all the calculations) if: (i) (ii) If the elasticity of demand is 0.5 and the quantity demanded decreases from 95.000 to 85.000. Draw the graph and indicate the equilibrium price and quantity (iii) The elasticity of supply is equal to 1 and the price increases from $40 to $50 Price per Tonne ($) 40 50 60 80 N 110 Quantity demanded 150 120 110 95 85 80 Quantity supplied 80 X 110 115 120 140
Part I True or False Directions: Read the sentences carefully, Write TRUE if the statement is correct and FALSE if the statement is incorrect. - Elasticity of demand refers to the change in demand when there is a change in another factor such as price or income 2. If demand for a good or service is static even when the price changes, demand is said to be inelastic 3. Examples of elastic goods include gasoline, while inelastic goods are items like canned goods and vitamin c tablets 4. The law of demand states that “elasticity shows how much a good or service is demanded relative to its movement in price". 5. Inelastic demand is when a demanded quantity for masks changes by a greater percentage compared to its percentage change in price 6. The opposite of a market economy is a planned economy, where investment and production decisions are decided by the government. 7. Unit elastic is when a percentage change in demand equals the price. 8. A mango fruit with an elastic demand gets more…
a)When John can sell totem poles for 1,800 each, he markets 60 annually. when the price falls to $600 each, he is willing to sell only 24 each year. What is his price elasticity of supply ? b) government pays attention to the elasticity of demand when selecting foods and services upon which to levy excise taxes. Assume a $1.00 tax is levied on some good and 10,000 units are sold. What is the tax revenue collected ?
If the price elasticity of demand for Good A is -0.15 and the price increases from $4 to $6. Calculate the percentage change in the quantity demanded of Good A using mid-point method.Answer: The percentage change in the quantity demanded of Good A is __________ percent.
18) Suppose that the percentage change in demand is 20%, the price elasticity of demand is 3, and the price elasticity of supply is 2. What is the percentage change in the equilibrium price? A) 4% B) 5% C) 15% D) 20% 19) Suppose that the percentage change in demand is 20%, the price elasticity of demand is 3, and the percentage change in the equilibrium price is 4%. What is the price elasticity of supply? A) 0 B) 2 C) 4 D) 5 15 15
Question 3 a. Producers prefer goods that have inelastic demand relationships. Why is that b. When the price that Netflix charges rises from $540 to $750 a month, the quantity demanded decreases from 400 million to 250 million subscriptions. Calculate the price elasticity of demand for Netflix charges. Is the demand elastic or inelastic? Would the demand for Netflix be more elastic or less elastic than the demand for overall streaming services? Why? [6 marks] c. When the price of flour falls from $100 to $80, the quantity demanded of flour increases from 10 to 25, the quantity demanded of rice decreases from 20 to 15, and the quantity demanded of beef increases from 18 to 35 i. Calculate the cross elasticity of demand for rice with respect to flour. [4 ii. Calculate the cross elasticity of demand for beef with respect to flour. [4 Of what use are these two cross elasticities of demand to the owner of a business that sells rice and beef? (2 marks] Question 4 a. The supply curve for…

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The supply of product X is elastic if the price of X rises by 16 Multiple Choice eBook 4 percent and quantity supplied rises by 6 percent. 7 percent and quantity supplied rises by 7 percent. 12 percent and quantity supplied remains the same. 5 percent and quantity supplied rises by 2 percent.