Refer to Table 3. Along which of the supply curves does quantity supplied move p
ID: 1164902 • Letter: R
Question
Refer to Table 3. Along which of the supply curves does quantity supplied move proportionately more than the price?
able 3 Supply Curve A $1.00 500 $2.00 600 Supply Curve B $1.00 600 $3.00 900 Supply Curve C $2.00 400 S5.00 700 Price Quantity Supplied 18. Refer to Table 3. Which of the three supply curves represents the least elastic supply? a. supply curve A supply curve B c. supply curve C d. There is no difference in the elasticity of the three supply curves. 19. Refer to Table 3. Along which of the supply curves does quantity supplied move proportionately more than the price? a. along supply curve B only b. along supply curves B and C c. along all three supply curves d. None. Quantity supplied moves proportionately less than the price along all of the three supply curvesExplanation / Answer
18. Elasticity of supply = (change in supply/ change in price) (Initial price/ initial quantity)
Elasticity of Supply curve A = (100/1)(1/500) = 1/5 = 0.2
Elasticity of suppy curve B= (300/2)(1/600) = 1/4 = 0.25
Elasticity of supply curve C = (300/3)(2/400) = 1/2 = 0.5
Supply curve A represents the least elastic supply . Hence, option (A) is correct.
19. If quantity supplied move proportionately more than the price, then elasticty has to be greater than 1 . In None of the supply curves does quantity supplied move proportionately more than price. Quantity supplied moves proportinately less than the price along all of the three supply curves because for all the three supply curves , elasticity is less than 1 . Hence, option(d) is correct.