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Homework answers / question archive / Currently, at a price of $1 each, 250 popsicles are sold per day in the perpetually hot town of Rostin
Currently, at a price of $1 each, 250 popsicles are sold per day in the perpetually hot town of Rostin. Consider the elasticity of supply. In the short run, a price increase from $1 to $2 is unit-elastic (Es = 1). In the long run, a price increase from $1 to $2 has an elasticity of supply of 1.50. How many popsicles will be sold each day in the short run if the price rises to $2 each? So how many popsicles will be sold per day in the long run if the price rises to $2 each?
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