price-elasticity-of-supply-pes

In recent months, the price of avocados has increased from AU$ 0.90 to AU$ 1.45. Bewdley Farm Shop in Margaret River has sought to maximise their profits by increasing the quantity supplied to the market. They have been able to increase sales from 110 units a week to 120 units a week.

Calculate the PES of avocados and explain one reason for the value 

Step 1: Calculate the % change in QS

<img alt=”percent sign triangle Q S space equals space fraction numerator 120 minus 110 over denominator 110 end fraction space cross times 100 percent sign triangle Q S space equals space 9.1 percent sign” data-mathml='<math style=”font-family:Arial” ><semantics><mstyle mathsize=”14px”><mo>%</mo><mo>&#9651;</mo><mi>Q</mi><mi>S</mi><mo>&#160;</mo><mo>=</mo><mo>&#160;</mo><mfrac><mrow><mn>120</mn><mo>-</mo><mn>110</mn></mrow><mn>110</mn></mfrac><mo>&#160;</mo><mo>&#215;</mo><mn>100</mn><mspace linebreak=”newline”></mspace><mspace linebreak=”newline”></mspace><mo>%</mo><mo>&#9651;</mo><mi>Q</mi><mi>S</mi><mo>&#160;</mo><mo>=</mo><mo>&#160;</mo><mn>9</mn><mo>.</mo><mn>1</mn><mo>%</mo></mstyle><annotation encoding=”application/vnd.wiris.mtweb-params+json”>{“language”:”en”,”fontFamily”:”Times New Roman”,”fontSize”:”18″}</annotation></semantics></math>’ height=”75″ role=”math” 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