If the price elasticity of supply is 0.5 and the quantity supplied decreases by 6%, then the price must have decreased by 3%. a. True b. False

False

Explanation:

The price elasticity of supply measures the change in quantity supplied when the price changes.

The basic trend is that when price increases, quantity supplied increases as well. The reverse is true.

Price elasticity of supply = %Change in quantity supplied / % change in price

0.5 = -6% / Change in price

0.5 * Change in price = -6%

Change in price = -6% / 0.5

= -12%

The statement above is therefore false because price should have reduced by 12% for quantity supplied to reduce by 6%

answer; strategic planning;

answercombination of ability and experience of the partners;