To plot the information on a graph, we can use the price points along the x-axis and the quantity supplied along the y-axis.
Price (k): 2, 4, 6, 8, 10, 12
Quantity Supplied: 75, 65, 55, 45, 35, 25
Now we can plot these points on a graph and connect them with a line to show the supply curve.
To calculate the elasticity of supply at the price of k4, we can use the formula:
Elasticity of Supply = (% change in quantity supplied) / (% change in price)
At k4:
Initial quantity supplied = 65
Final quantity supplied = 45
% Change in quantity supplied = [(45-65)/65] * 100% = -31.8%
Initial price = 4
Final price = 2
% Change in price = [(2-4)/4] * 100% = -50%
Elasticity of Supply at k4 = (-31.8%) / (-50%) = 0.636
To calculate the elasticity of supply at the price of k10:
At k10:
Initial quantity supplied = 35
Final quantity supplied = 25
% Change in quantity supplied = [(25-35)/35] * 100% = -28.6%
Initial price = 10
Final price = 8
% Change in price = [(8-10)/10] * 100% = -20%
Elasticity of Supply at k10 = (-28.6%) / (-20%) = 1.43
Therefore, the elasticity of supply at the price of k4 is 0.636 and at the price of k10 is 1.43.
12
10
8
6
4
2
25 35 45 55 65 75
Plot the information on a graph?
Calculate the elasticity of supply at the price of k4 and at the price of k10?
1 answer