Suppose That After a Five Per Cent Increase in the Price

question 147

Multiple Choice

Suppose that after a five per cent increase in the price of timber, a forestry company increases its supply of timber by 10 per cent in the next three months, and 15 per cent by 12 months.This means that the elasticity of supply is _____.

• A)3 at three months and 2 at 12 months
• B)0.5 at three months and 0.3 at 12 months
• C)2 at three months and 3 at 12 months
• D)0.3 at three months and 0.5 at 12 months

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