Respuesta :
Answer: The price increase is about 6.17 percent.
Explanation:
The price elasticity of supply (PES) is the elasticity of the quantity supplied of a product to its price change. Price elasticity of supply is the ratio of the percentage change in the quantity supplied of a good or service to the percentage change in price.
The Price Elasticity of Supply is positive as a result of the law of supply that states that there's a direct relationship between the quantity supplied and price i.e. a price increase leads to an increase in quantity supplied and vice versa.
To solve the question,
PES = 0.6
% change in quantity supplied = 3.7
% change in price = Unknown
Let percentage change in price be denoted by b.
PES = % change in quantity demanded / % change in price
0.6 = 3.7 / b
Cross multiplying,
b = 3.7 / 0.6
b = 6.17
Recall that b is the percentage change on price.
Therefore, the percentage change in price is 6.17.
The price increase is about option c. 6.17 percent.
Calculation of the increment in price:
Since
Elasticity of supply = 0.6
Percentage Increase in the Quantity Supplied = 3.7%
As per the law of supply, it shows the direct relationship between the price and supply
So,
Supply Elasticity = % Change in the Quantity Supplied / % Change in the Price
Now
0.6 = 3.7% / % Change in the Price
% Change in the Price = 3.7 % / 0.6
% Change in the Price = 6.17%
Learn more about supply here: https://brainly.com/question/24590978
