Assume Qd=10-2p and Qs=p what is the elasticity of Supply if price increases from $1 to $3?
(a) Unit elastic
(b) Inelastic
(c) Elastic
(d) Not enough information is available to answer this question

A. unit elastic

Explanation:

The price elasticity of supply can be calculated by a formula as below:

+) Price elasticity of supply = Changes in supplied quantity/ Changes in prices                                           = (%ΔQs)/(%ΔP)

When price = $1, the quantity supplied is: Qs = p = 1

When price = $3, the quantity supplied is: Qs = p = 3

So that when price increases from $1 to $3, the quantity supplied changes from 1 to 3.

=> Changes in supplied quantity is: 3 -1 = 2

Changes in price is: $3 - $1 = $2

=> Price elasticity of supply = 2/2 =1

When the price elasticity of supply is equal exactly to 1, the product is considered to be unit - elastic.

So that A is the true answer.

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.

answer; dividing net income by 1- t ;