EBK ECONOMICS
EBK ECONOMICS
21st Edition
ISBN: 8220106637173
Author: McConnell
Publisher: YUZU
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Chapter 6, Problem 6P

ADVANCED ANALYSIS Currently, at a price of $1 each. 100 popsicles are sold per day in the perpetually hot town of Rostin. Consider the elasticity of supply, hi the short run, a price increase from $1 to $2 is unit- elastic (Es =1.0). So how many popsicles will be sold each day in the short run if the price rises to $2 each? In the long run, a price increase from $1 to $2 has an elasticity of supply of 1.50. So how many popsicles will be sold per day in the long run if the price rises to $2 each? (Hint: Apply the midpoint approach to the elasticity of supply.) LO6.4

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