(Figure: The Market for Lattes) Use Figure: The Market for Lattes.What is the price elasticity of supply between the prices of $2 and $2.50 per cup,using the midpoint formula?

A) 0.33
B) 1.00
C) 1.51
D) 3.00

Question

Sarah Berendes · Accepted Answer

Final Answer : B, Explanation :  The price elasticity of supply is calculated using the midpoint formula: [(Q2 - Q1) / ((Q2 + Q1)/2)] / [(P2 - P1) / ((P2 + P1)/2)]. Assuming the quantities supplied at $2 and $2.50 are Q1 and Q2 respectively, the calculation results in an elasticity of 1.00.

(Figure: The Market for Lattes) Use Figure: The Market for Lattes.What is the price elasticity of supply between the prices of $2 and $2.50 per cup,using the midpoint formula?

A) 0.33
B) 1.00
C) 1.51
D) 3.00

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(Figure: The Market for Lattes) Use Figure: The Market for Lattes.What is the price elasticity of supply between the prices of $2 and $2.50 per cup,using the midpoint formula?A) 0.33B) 1.00C) 1.51D) 3.00

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Learning Objectives

Learning Objectives

Related questions

(Figure: The Market for Lattes) Use Figure: The Market for Lattes.What is the price elasticity of supply between the prices of $2 and $2.50 per cup,using the midpoint formula?

A) 0.33
B) 1.00
C) 1.51
D) 3.00