Suppose the Quantity Supplied of Computers Increases from 2 Million

question 141

Essay

Suppose the quantity supplied of computers increases from 2 million to 4 million units as the price of a computer increases from $600 to $700. What does the price elasticity of supply equal?

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Definitions:

Specific Tariff

A specific tariff is a fixed fee imposed by a government on each unit of imported goods, based on quantity rather than value.

Lump-Sum Tax

A fixed amount of tax that an individual or business is required to pay, regardless of income or transaction value.

World Price

The price at which goods are traded internationally, determined by global supply and demand conditions.