The market supply curve for scooters is given by Qs = 2p – 100. If the market price is $127, what is the price elasticity of supply? [Round your answer to 2 decimal places]
Question
The market supply curve for scooters is given by Qs = 2p – 100. If the market price is $127, what is the price elasticity of supply? [Round your answer to 2 decimal places]
Solution
The price elasticity of supply is calculated using the formula:
Elasticity = (dQ/dP)*(P/Q)
However, in this case, we are given a linear supply function (Qs = 2p – 100), so the elasticity of supply is simply the slope of the supply curve, which is 2.
Therefore, the price elasticity of supply is 2.00.
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