Question

If the price elasticity of supply is 0.5 and the quantity supplied decreases by g 6%, then the price must:_______

Answer 1

Answer: Price decreased by 12%

Step-by-step explanation:

Price elasticity = %Change in quantity / % change in price

0.5 = 6% / % change in price

0.5 * % change in price = 6%

% change in price = 6%/0.5

% change in price = 12%