Own-Price Elasticity of Supply (E^s)

question 10

Short Answer

Own-Price Elasticity of Supply (E^s).
Suppose that the price of pizza increases from P₀=usd 6/pizza to P₁=usd 10/pizza, resulting in an increase in pizzas produced from Q₀= 10 pizzas to Q₁= 12 pizzas. A. Calculate ε at the initial values of P and Q. B. Is pizza supply elastic or inelastic? Demonstrate and explain. C. Is the pizza firm in the immediate run, short run, or long run? Explain.