Currently, at a price of $1 each 100 popsicles are solid per day in the perpetually hot town of Rostin. Consider the elasticity of supply. In the short run, a price increase from $1 to $2 is unit-elastic (E5=1.0), So how many popsicles will be sold each day in the short run if the price rises to $2 each? In the long run, a price increase from $1 to $2 has an elasticity of supply of 1.50. So how many popsicles will be sold per day in the long run if the price rises to $2 each?© BrainMass Inc. brainmass.com October 10, 2019, 3:59 am ad1c9bdddf
Recall that elasticity = (% change in supply)/(% change in price)
Price has ...