Estimate the price-elasticity of supply; interpret about the algebraic signs of the coefficients.
Provided below is the supply schedule for s given product. Use this data to answer the subsequent.
|
Price elasticity of supply
|
Units supplied
|
Price
|
|
|
0
|
2
|
|
|
2
|
4
|
|
|
4
|
6
|
|
|
6
|
8
|
|
|
8
|
10
|
|
|
10
|
12
|
|
|
12
|
14
|
|
|
14
|
16
|
- Compute the coefficient of price-elasticity of supply for the seven prices ranges given above and complete the table.
- Illustrate what do you notice about the algebraic signs for the values which you have just computed? Explain why this is so.
- Write the expression for the price-elasticity of supply as the ratio of a marginal concept and an average concept. Explain why all linear supply curves emanating from the origin manifest unitary price-elasticity.