Suppose that the price elasticity of supply is 1.25 and the quantity supplied increases by 10%. Other things being equal, the percentage change in the price should be:
A. a 0.8% increase in the price.
B. an 8% increase in the price.
C. a 1.25% increase in the price.
D. a 12.5% increase in the price.
Answer: B
Economics
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