# Consider the following market supply: QS = c, where c > 0. At price P = 0.5(a/b), the absolute...

## Question:

Consider the following market supply: QS = c, where c > 0. At price P = 0.5(a/b), the absolute value of the price elasticity of this market supply is e. (NOTE: Write your answer in number format, with 2 decimal places of precision level; do not write your answer as a fraction. Add a leading zero and trailing zeros when needed.

HINTS: First compute the expression for the price elasticity of this market supply. Next, compute the market quantity supplied at P = 0.5(a/b). Finally, substitute your P and QS values into your expression of the price elasticity of this market supply, to determine the absolute value of the price elasticity at that point.)

## The Price Elasticity of Supply:

The price elasticity of supply measures the change in the quantity supplied of a good or service when the price of the product increases or decreases by a given amount. It is normally expressed as the ratio of the percentage change in the quantity supplied to the percentage change in the price of the product.

## Answer and Explanation: 1

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View this answerThe price elasticity of supply at a point is calculated as:

- {eq}E_s = \dfrac{\Delta Qs}{\Delta P}\times \dfrac{P}{Qs} {/eq}

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Chapter 2 / Lesson 14Understand what elasticity of supply is. Learn more about price elasticity of supply. Know about elastic and inelastic supply with some elastic supply examples.

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