When the price of a good rises from $5 to $7 a unit, the quantity supplied increases from 110 to 130 units a day. The price elasticity of supply is _______. The supply of the good is _______
A. 60; elastic
B. 10; elastic
C. 0.5; inelastic
D. 2; inelastic
C The price elasticity of supply equals (20/120)รท($2/$6), which is 0.5; the price elasticity of supply is less than 1.0, so the supply is inelastic.
Economics
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