Respuesta :
Answer:
The price elasticity of supply is 1.42.
Explanation:
The price elasticity of supply is the measure of the degree of responsiveness of quantity supplied to a change in price. It is the ratio of proportionate change in quantity supplied and proportionate change in price.
An economist doing an analysis on the market for original paintings finds that a 7% increase in price will lead to an increase in the quantity supplied by 10%.
Price elasticity of supply
= [tex]\frac{\% \Delta Qs}{\% \Delta P}[/tex]
= [tex]\frac{10}{7}[/tex]
= 1.42
The price elasticity of supply is 1.43.
What is the price elasticity of supply?
Price elasticity of supply measures the responsiveness of quantity supplied to changes in price of the good.
Price elasticity of supply = percentage change in quantity supplied / percentage change in price
10% / 7% = 1.43
If the absolute value of price elasticity is greater than one, it means supply is elastic. Elastic supply means that quantity supplied is sensitive to price changes.
To learn more about supply elasticity, please check: https://brainly.com/question/26634801
