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Currently, at a price of $0.5 each, 200 popsicles are sold per day in the perpetually hot town of Rostin. Consider the elasticity of supply. In the short run, a price increase from $0.5 to $1 is unit-elastic (E  s = 1). In the long run, a price increase from $0.5 to $1 has an elasticity of supply of 1.5. (Hint: Apply the midpoints approach to the elasticity of supply.)

1. How many popsicles will be sold/supplied each day in the short run if the price rises to $1 each?

  _________   Per day

2. How many popsicles will be sold /supplied per day in the long run if the price rises to $1 each?

__________   Per day

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91225309

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