Worksheet 12: Price Elasticity of Supply 1. If an 8 percent decrease in the price of lobster leads to a 15 percent decrease in the quantity supplied of lobster, calculate the price elasticity of supply. Show work. How would you describe the supply of lobster? 2. Suppose that as the price of some product increases from $4.00 to $5 .00 per unit the quantity supplied rises from 500 to 1,000 units per month. Calculate the price elasticity of supply using the midpoint formula. [5 the supply of the product elastic? 3. Suppose the current price of oil is $60 a barrel and the quantity supplied is 800 million barrels per day. If the price elasticity of the supply of oil in the short run is estimated at 0.5, calculate the percentage change in quantity supplied increase when the price of oil rises to $68 a barrel? Use the midpoint formula What is the approximate change in the number of barrels of oil supplied per day (use the point formula with 800 million barrels as your benchmark)? 4. Jack, a sherman, goes out with a boat and a net early each morning. At 7:00 am, Jack takes his day's catch to the sh market and sells it at the market price. As a result of nevir information about the benecial effects on health of a sh-rich diet, the demand for sh increases. How will Jack's supply of sh respond to the increased demand and higher price for his product in the short run and in the long run? Elasticity: The Responsiveness of Demand and Supply 88