Suppose That After a Five Per Cent Increase in the Price

Multiple Choice

Suppose that after a five per cent increase in the price of timber, a forestry company increases its supply of timber by 10 per cent in the next three months, and 15 per cent by 12 months.This means that the elasticity of supply is _____.

A) 3 at three months and 2 at 12 months
B) 0.5 at three months and 0.3 at 12 months
C) 2 at three months and 3 at 12 months
D) 0.3 at three months and 0.5 at 12 months