Answer: Coefficient of elasticity of supply is 0.75.
Explanation:
Price elasticity of supply measures the responsiveness of quantity supplied to a change in the price of the good. It can be measured using the percentage point method,
[tex]e_{s} = \frac{Percentage change in Quantity supplied}{Percentage change in price}[/tex]
[tex]=\frac{15}{20}[/tex]
[tex]=0.75[/tex]
Therefore, coefficient of elasticity of supply is 0.75. Since it is less than 1 we can infer that supply for this good is relatively inelastic.
