Practice prompt · Q:economics-and-market-foundations/interpret-supply-elasticity-001

Interpret supply responsiveness at the offer layer

Computes supply elasticity while separating offers from capacity, production, inventory, transactions, and cash.

Updated Aug 7, 2026 Review due Nov 7, 2026

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On one fixed weekly supply line, price rises from $50 to $70 and quantity supplied rises from 700 to 900. Which interpretation is controlled?

Choose the best answer. a Midpoint supply elasticity is +0.75, inelastic over this weekly arc; the 900 offered units do not establish long-run capacity, production, inventory, completed sales, revenue, or cash. b Supply elasticity is +10 because quantity rises ten units per dollar, proving elastic supply. c At $70 the sellers produced and sold all 900 units, so revenue is necessarily $63,000.

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Answer: a

Choice a. (200/800) / (20/60) = 0.75; retain the weekly offer scope and seek separate operational and accounting records.