Price Elasticity of Supply Practice Test

Using the supply data shown for a wheat farm in the very short run (the crop is already planted and harvested quantity cannot be quickly changed), calculate the price elasticity of supply (PES) between Point 1 and Point 2 using the midpoint method.

Supply data (per week):

• Point 1: $P = $8, $Q_s = 100
• Point 2: $P = $10, $Q_s = 110

Using the supply data shown for a small bakery in the short run (its ovens are already at capacity, so output can only be increased slightly by adding overtime hours), calculate the price elasticity of supply (PES) between Point 1 and Point 2 using the midpoint method.

Supply data (per day):

• Point 1: $P = $10, $Q_s = 40
• Point 2: $P = $12, $Q_s = 44