Answer:
D 0.60.
Explanation:
Elasticity of Supply measure the responsiveness of supply against the change in price of the product.
Using mid point method
Change in Quantity = ( S2 - S1 ) / [ ( S2 + S1 )/2 ]
Change in Quantity = ( 30 - 20 ) / [ ( 30 + 20 )/2 ]
Change in Quantity = 10 / 25
Change in Quantity = 0.4
Change in price = ( P2 - P1 ) / [ ( P2 + P1 )/2 ]
Change in price = ( $20 - $10 ) / [ ( $20 + $10 )/2 ]
Change in price = $10 / $15
Change in price = 0.67
Elasticity of Supply = Change in Quantity / Change in Price
Elasticity of Supply = 0.4 / 0.67
Elasticity of Supply = 0.597 = 0.60
