From the table above, Calculate the price elasticity of supply

Explanation

The elasticity of supply = % change in quantity supplied /%change in price

First, we calculate the individual change in supply and price. hence we have:

For supply we have: ∆Qs/Old Qs x 100

=(24 - 20 )/20 x 100
=4/20 x 100
=20%

For price we have: ∆P/Old price x 100
=(10 - 8 )/8 x 100
=2/8 x 100
=25%

%∆Qs/%∆price
=20/25
=0.8