Refer to the Diagram and Assume That Price Decreases from $10

question 260

Multiple Choice

Refer to the diagram and assume that price decreases from $10 to $2. The coefficient of the price elasticity of supply (midpoint formula) relating to this price change is about

• A)4, and supply is elastic.
• B)1, and supply is unit elastic.
• C)0.5, and supply is inelastic.
• D)0.25, and supply is inelastic.