Microeconomics: Principles, Applications, and Tools (8th Edition)

Published by Prentice Hall
ISBN 10: 0-13294-886-9
ISBN 13: 978-0-13294-886-9

Chapter 5 - Elasticity: A Measure of Responsiveness - Exercises - 5.5 The Price Elasticity of Supply - Page 124: 5.6

Answer

Output will increase by 0.3% in the short-run and 52.5% in the long-run.

Work Step by Step

$\Delta qty\%=\Delta price\%\times E_s$ Short-run $\Delta qty\%=15\times0.2=0.3\%$ Long-run $\Delta qty\%=15\times3.5=52.5\%$
Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.