Suppose a 4 Per Cent Increase in Price Results in a 2

Multiple Choice

Suppose a 4 per cent increase in price results in a 2 per cent increase in the quantity supplied of a good.Calculate the price elasticity of supply and characterise the product.

A) 2; The product is elastic.
B) 0) 2; The product is inelastic.
C) 0) 5; The product is inelastic.
D) 50%; The product is inelastic.