If the market for a product is broadly defined, then there are few substitutes for the product and the demand for the product is relatively inelastic. the expenditure on the good is likely to make up a large share of one's budget. there are many substitutes for the product and the demand for the product is relatively elastic. the good has many complements. An increase in the demand for green tea raises the price of apples from US$16 a kilo to US$20 a kilo. As a result, quantity supplied increases by 30 percent. Using the midpoint formula, calculate the value of the price elasticity of supply. 1.35 7.5 1.875 2.22 If 20 units are sold at a price of US$50 and 30 units are sold at a price of US$40, what is the absolute value of the price elasticity of demand? Use the midpoint formula. 0.56 2.5 1.8 1 The demand for most farm products is relatively inelastic. With all else constant, what is the effect on farm revenues as a result of the introduction of new and better farm equipment which increases productivity? Farm revenues remain constant because consumers will not increase their consumption of farm products by much. Farm revenues increase. Farm revenues decrease. Farm revenues could increase or decrease depending on the cost of this new equipment.