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The supply of labor (input for production) in an organization from 100 to 150 and the...

The supply of labor (input for production) in an organization from 100 to 150 and the price of labor decreased from $20.00 to $25.00. Calculate the price elasticity of supply.

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Answer #1

P

Q

% change in P

% change in Q

Es

20

100

25

150

0.25

-0.5

-2

Es = %change in Q/%change in P = ((100-150)/100)/((25-20)/20) = -2

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