The accompanying table gives part of the supply schedule for personal computers in the United States.
Price of computer Quantity of computers supplied
$1,100……………………………. 12,000
900……………………………….. 8,000
a. Calculate the price elasticity of supply when the price increases from $900 to $1,100 using the midpoint method.
b. Suppose firms produce 1,000 more computers at any given price due to improved technology. As price increases from $900 to $1,100, is the price elasticity of supply now greater than, less than, or the same as it was in part a?
c. Suppose a longer time period under consideration means that the quantity supplied at any given price is 20% higher than the figures given in the table. As price increases from $900 to $1,100, is the price elasticity of supply now greater than, less than, or the same as it was in part a?