Question: If a coal mining company would be willing to produce and sell 9 million tons a year at $150/ton, but would be willing to produce and sell 11 million tons a year at $250/ton,
- calculate its price elasticity of supply.
- Is this supply elastic or inelastic?
- If the price of coal were to remain at $250/ton over the next ten years (with no inflation in general prices), is this firm's supply curve likely to become more or less elastic?
- Explain why.