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The quantity supplied of hot dogs is 200 at the unit price of $3.50. Suppose the price elasticity of supply by the intial value method is 2, and you would like to induce sellers to increase the quantity of hot dogs supplied to 220. The new price must be:

a. $1.50

b. $2.00

c. $2.50

d. $3.00

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Related questions

1. Presented below are demand and supply schedules for bread in East Yeastville, Colorado.

| price | quantity demanded | quantity supplied |

| ($/loaf) | (loaves / week) | (loaves / week) |

| 5.00 | 1000 | 6000 |

| 4.50 | 1300 | 4500 |

| 4.00 | 1600 | 4000 |

| 3.50 | 2000 | 3500 |

| 3.00 | 3000 | 3000 |

| 2.50 | 3200 | 2700 |

| 2.00 | 4000 | 2200 |

| 1.50 | 4500 | 1800 |

| 1.00 | 5400 | 1400 |

| .50 | 7000 | 1200 |

a. Is the Law of demand satisfied? Yes/no. How do you know?

b. What is the equilibrium price? _______ And the equilibrium quantity? ________

c. At a price of $4.00, is there a shortage or surplus? __________. How big is it? ______

d. At a price of $1.00, how much would be bought and sold? _________

e. Suppose that supply increases by 1800 units at each price. At the original equilibrium price is there

a shortage or a surplus? When the market adjusts to its new equilibrium, what

will the new price be? And the new equilibrium quantity?

Suppose the value of the price elasticity of supply is 4. What does this mean?
A. A 1 percent increase in the price of the good causes the supply curve to shift upward by 4 percent.*
B. For every $1 increase in price, the quantity supplied increases by 4 units.
C. A 4 percent increase in the price of the good causes quantity supplied to increase by 1 percent.
D. A 1 percent increase in the price of the good causes quantity supplied to increase by 4 percent.
Suppose the value of the price elasticity of supply is 4. What does this mean?
A. A 1 percent increase in the price of the good causes the supply curve to shift upward by 4 percent.*
B. For every $1 increase in price, the quantity supplied increases by 4 units.
C. A 4 percent increase in the price of the good causes quantity supplied to increase by 1 percent.
D. A 1 percent increase in the price of the good causes quantity supplied to increase by 4 percent.
Ā 

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