Question

1. When the price of a given type of hamster chow increased by 25%, 25% more units were produced and sold. Calculate the appropriate elasticity. You will interpret this answer in the next question.Enter only numbers, a decimal point, and/or a negative sign as needed. Round all intermediate steps to four decimal places and your final answer to two decimal places.

2.

The previous question was describing

Group of answer choices

relatively elastic price elasticity of supply

unit elastic price elasticity of demand

unit elastic price elasticity of supply

relatively elastic price elasticity of demand

relatively inelastic price elasticity of supply

relatively inelastic price elasticity of demand

Answer 1

Answer : 1) Price elasticity of supply (Es) = % changes in quantity supplied / % changes in price level

=> Es = 25 / 25 = 1.

Therefore, here the price elasticity of supply is 1.

2) The answer is option C : "unit elastic price elasticity of supply".

For unit price elasticity of supply the Es become equal to 1. Here Es is 1. So, here the price elasticity of supply is unit elastic.

Hence except option C other options are not correct. Therefore, option C is the correct answer.