Question

The monthly supply of desktop personal computers is given by the equation QS = 15, 000...

The monthly supply of desktop personal computers is given by the equation QS = 15, 000 + 43.75P . At a price of $800, what is the price elasticity of supply? At this price, is supply elastic?

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Answer #1

Given monthly supply of desktop personal computers as

At P=$800 ,

  

  

Price elasticity of supply at P=$800 is given by

Putting values of , P=$800 and QS=50000 in

Price elasticity of supply at P=$800 is 0.7

No at P=$800 price elasticity of supply is not elastic because it is less than 1 (0.7<1).

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