In: Economics
Advanced Analysis) Currently, at a price of $1 each,
100 popsicles are sold per day in the perpetually hot town of
Rostin. Consider the elasticity of supply. In the short run, a
price increase from $1 to $2 is unit elastic (Es = 1.0).
In the long run, a price increase from $1 to $2 has an elasticity
of supply of 1.50. (Hint: Apply the midpoints approach to the
elasticity of supply.)
a. How many popsicles will be sold each day in the
short run if the price rises to $2 each?
Instructions: Enter only a whole number for your
answer.
per day=
b. How many popsicles will be sold per day in the
long run if the price rises to $2 each?
Instructions: Enter only a whole number for your
answer.
per day=