Respuesta :
The correct answer from the given options is "125,000".
E S (elasticity of supply) = .5
( supply is inelastic: E S < 1 )
Now we use the following formula:
E S = Δ Q / Δ P * P / Q
Δ Q = change in quantity
Δ P = change in price
P = initial price
Q = initial quantity.
now put the values;
.5 = Δ Q / 25 * 50 / 100,000
Δ Q = .5 * 25 * 100,000 / 5
Δ Q = 25,000
Quantity at the new price = Q ( new ) = 100,000 + 25,000
= 125,000
E S (elasticity of supply) = .5
( supply is inelastic: E S < 1 )
Now we use the following formula:
E S = Δ Q / Δ P * P / Q
Δ Q = change in quantity
Δ P = change in price
P = initial price
Q = initial quantity.
now put the values;
.5 = Δ Q / 25 * 50 / 100,000
Δ Q = .5 * 25 * 100,000 / 5
Δ Q = 25,000
Quantity at the new price = Q ( new ) = 100,000 + 25,000
= 125,000
