1.2.5 Elasticity of supply

Question 4

An independent manufacturer of specialized carbon-fiber bicycle frames operates with some spare capacity and has estimated the price elasticity of supply (PES) of its frames to be +1.6. Following a sudden contraction in market demand, the equilibrium price of these frames falls by 12.5%. Which one of the following is the resulting percentage change in the quantity supplied of these carbon-fiber frames?

A decrease of $7.81%7.81\%$

A decrease of $2.0%2.0\%$

A decrease of $20.0%20.0\%$

An increase of $20.0%20.0\%$

1.2.5 Elasticity of supply

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Question 4

An independent manufacturer of specialized carbon-fiber bicycle frames operates with some spare capacity and has estimated the price elasticity of supply (PES) of its frames to be +1.6. Following a sudden contraction in market demand, the equilibrium price of these frames falls by 12.5%. Which one of the following is the resulting percentage change in the quantity supplied of these carbon-fiber frames?

A decrease of $7.81%7.81\%$

A decrease of $2.0%2.0\%$

A decrease of $20.0%20.0\%$

An increase of $20.0%20.0\%$

1.2.5 Elasticity of supply

Question 4

Markscheme

1.2.5 Elasticity of supply

Question 4

Markscheme

1.2.5 Elasticity of supply

Question 4

1.2.5 Elasticity of supply Questions

1.2.5 Elasticity of supply

Question 4

1.2.5 Elasticity of supply Questions