**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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Similar questions

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?
Suppose a movie theater raises the price of popcorn 10 percent, but customers do not buy any less popcorn. What does this tell you about the price elasticity of demand? What will happen to total revenue as a result of the price increase?
Suppose you are in change of sales at a pharmaceutical company, and your firm has a new drug that causes bald men to grow hair. Assume that the company wants to earn as much revenue as possible from this drug. If the elasticity of demand for your companys product at the current price is 1.4, would you advise the company to raise the price, lower the price, or to keep the price the same? What if the elasticity were 0.6? What if it were 1? Explain your answer.
As the price of good X rises from 10 to 12, the quantity demanded of good Y rises from 100 units to 114 units. Are X and Y substitutes or complements? What is the cross elasticity of demand?
(Price Elasticity of Supply) Calculate the price elasticity of supply for each of the following combinations of price and quantity supplied. In each case, determine whether supply is elastic, inelastic, perfectly elastic, perfectly inelastic, or unit elastic. a. Price falls from $2.25 to $1.75; quantity supplied falls from 600 units to 400 units. b. Price falls from $2.25 to $1.75; quantity supplied falls from 600 units to 500 units. c. Price falls from $2.25 to $1.75; quantity supplied remains at 600 units. d. Price increases from $1.75 to $2.25, quantity supplied increases from 466.67 units to 600 units.
If supply is elastic, will shifts in demand have a larger effect on equilibrium quantity or on price?
What is the price elasticity of supply? Can you explain it in your own words?
Using the midpoint formula for calculating the elasticity of supply, if the price of a good rose from $95 to $105, what would be the elasticity of supply if the quantity supplied changed from a. 38 to 42? b. 78 to 82? c. 54 to 66?
If the midpoint on a straight-line demand curve is at a price of $7, what can we say about the elasticity of demand for a price change from $12 to $10? What about from $6 to $4?
(Price Elasticity and Total Revenue) Fill in the blanks for each price-quantity combination listed in the following table. Now graph this relationship, making sure to label each axis. What relationship have you depicted?

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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.