Supply Elasticity Inversely Proportional to Price Steps:

• Use the formula S = 10% / P to find initial elasticity at P = $1: S = 10% / 1 = 10%.
• Find new elasticity at P = $2: S = 10% / 2 = 5%.
• Compute the ratio of new to initial elasticity: 5% / 10% = 0.5.
• The elasticity when price rises from $1 to$2 is 0.5 times the original.

Why A is correct:

• The formula S = 10% / P shows elasticity is inversely proportional to price; doubling price halves elasticity to a factor of 0.5.

Why the others are wrong:

• B. 1.0 assumes constant elasticity, ignoring the inverse relationship.
• C. 2.0 implies elasticity doubles with price, opposite the formula.
• D. 5.0 matches the absolute new value (treating 10% as 10), but the question seeks the proportional change.

Final answer: A