Problem:
Provided below is the supply schedule for s given product. Use this data to answer the following.
|
Price elasticity of supply
|
Unit supplied
|
Price
|
|
-
|
0
|
2
|
|
-
|
2
|
4
|
|
-
|
4
|
6
|
|
-
|
6
|
8
|
|
-
|
8
|
10
|
|
-
|
10
|
12
|
|
-
|
12
|
14
|
|
-
|
14
|
16
|
Required:
Question 1: Evaluate the coefficient of the price-elasticity of supply for the seven (7) prices ranges given above and complete table.
Question 2: What do you observe about the algebraic signs for the values which you have just evaluated? Describe why this is so.
Question 3: Write the expression for price-elasticity of supply as the ratio of the marginal concept and an average concept. Describe why all linear supply curves emanating from origin manifest unitary price-elasticity.