If a Producer Lowers Its Price from $10 to $5

question 151

Multiple Choice

If a producer lowers its price from $10 to $5, leading to a change in quantity supplied of 8 units, using the midpoint method, what would be the value of the price elasticity of supply if the initial quantity supplied was 20 units?

• A) E_s = 0.75
• B) E_s = 0.67
• C) E_s = 1.29
• D) E_s = 1.5

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