Question

suppose that the quantity supplied of beef decreased by 24% as a result of an 16% decrease in the price of beef. 1. from this information we can conclude that the implied price elasticity of supply is equal to select 2. this means that th 3. let’s denote the a normally interpret select 4....the quantity supplied of beer decrease by select

Explanation:

Step1: Recall price - elasticity of supply formula

The formula for price - elasticity of supply ($E_s$) is $E_s=\frac{\%\text{ change in quantity supplied}}{\%\text{ change in price}}$.

Step2: Identify the percentage changes

The $\%$ change in quantity supplied of beef is $- 24\%$ (a decrease) and the $\%$ change in price of beef is $-16\%$ (a decrease).

Step3: Calculate the price - elasticity of supply

$E_s=\frac{-24\%}{-16\%}=1.5$.

Answer:

1. 1.5
2. The supply of beef is elastic since $E_s = 1.5>1$, meaning that the percentage change in quantity supplied is greater than the percentage change in price.
3. A positive value for price - elasticity of supply indicates a direct relationship between price and quantity supplied. In this case, as the price decreases, the quantity supplied decreases, and vice - versa. The value of 1.5 implies that for a 1% change in price, the quantity supplied changes by 1.5%.
4. N/A (no relevant question provided for this part in the problem statement)