Advanced Analysis) Currently, at a price of $1 each, 100 popsicles are sold per day in...

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 (E_s = 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=

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Expert Solution

Rahul Sunny answered 1 year ago

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