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A. What is the formula for measuring the price elasticity of supply?
B. Suppose the price of apples goes up from $20 to $23 a box. In direct response, Goldsboro Farms supplies 1,300 boxes of apples instead of 1,200 boxes. Compute the coefficient of price elasticity (midpoints approach) for Goldsboro’s supply.
Price elasticity =
C. Is its supply elastic, or is it inelastic?
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