If the price elasticity of supply is +4 and the price rises by 15%, what will be the new quantity supplied given the initial sales were 200 units?

Explanation

The price elasticity of supply (PES) of +4 means that for every 1% increase in price, the quantity supplied increases by 4%. With a 15% price increase, the quantity supplied will rise by 4 × 15% = 60%. Therefore, the new quantity supplied = 200 units × (1 + 0.60) = 320 units.