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Question
Which formula is used to calculate the elasticity of supply using the percentage method?
Options
ΔQ/ΔP
(ΔQ/Q)/(ΔP/P)
(Q/ΔQ)×(ΔP/P)
Q×P
MCQ
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Solution
(ΔQ/Q)/(ΔP/P)
Explanation:
The percentage method defines elasticity of supply as the ratio of the percentage change in quantity supplied to the percentage change in price.
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