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Suppose the price elasticity of supply for soccer balls is 0.3 in the short run and 1.2 in the long run. If an increase in the demand for soccer balls causes the price of soccer balls to increase by 20%, then the quantity supplied of soccer balls will increase by about:________.

Respuesta :

jepessoa

Answer:

  • 6% in the short run
  • 24% in the long run

Explanation:

In the short run, the effect of a 20% increase in the price of soccer balls will result in a ⇒ 0.3 x 20% = 6% increase in the quantity supplied.

In the long run, the effect of a 20% increase in the price of soccer balls will result in a ⇒ 1.2 x 20% = 24% increase in the quantity supplied.

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