Suppose the value of the price elasticity of supply is 4.
this means?
A. For every $1 increase in price, the quantity supplied increases by
4 units.
B. A 1% increase in the price of the good leads to the supply of
the curve shifts upwards by 4%.
C. A 4% increase in the price of the good causes the quantity
expected to increase by 1 percent.
D. A 1% increase in the price of the good causes the quantity
expected to increase by 4 percent.
Solution: 1% increase in the price of good causes
the quantity supplied will increase by 4%
Explanation: The price elasticity of supply measures the
responsiveness of the quantity supplied in response to a change in
the price