Suppose the price of tomatoes fell from 58 a crate to 22 a c

Suppose the price of tomatoes fell from $58 a crate to $22 a crate. A typical tomato farmer supplies 308 crates a day at $58 a crate, but at $22 a crate would supply 92 crates a day.

Solution

Price elasticity of supply = (Change in Quantity/Change in Price)*P/Q

Change in quantity = 308 - 92

= 216

Change in Price = 58 -22

=36

substitute in Formula = 216/36 *58/308

=12,528/11088

=1.12

Price elasticity of Tomatoes is 1.1

If the price remains the same , then elasticity of supply will not change since the elasticity of supply shows the relationship between the price and quantity supplied

Hence correct answer is (d)