The diagram below shows the original market demand (D1D_1D1) and supply (SSS) curves for organic avocados. A fall in household income causes a decrease in the demand for organic avocados, shifting the demand curve from D1 D_1\,D1 to D2D_2D2.
From the above diagram, it can be concluded that when the equilibrium shifts from E1 E_1\,E1 to E2E_2E2, the price elasticity of supply of organic avocados is
+1.6+1.6+1.6
−0.625-0.625−0.625
+0.625+0.625+0.625
−1.6-1.6−1.6
