Price Elasticity of Supply Calculation Steps:

• Note the percentage change in price: +20%.
• Note the percentage change in quantity supplied: +30%.
• Calculate PES using formula: PES = (%Δ quantity supplied) / (%Δ price) = 30% / 20% = 1.5.
• Compare to 1: 1.5 > 1, so supply is elastic. Why C is correct:
• PES > 1 means quantity supplied changes by a larger percentage than price, indicating elastic supply per the elasticity definition. Why the others are wrong:
• A: PES = 0 implies no quantity response to price change, but quantity increased.
• B: PES < 1 implies inelastic supply, but calculated value exceeds 1.
• D: PES = 1 implies unit elasticity (equal percentage changes), but 1.5 ≠ 1. Final answer: C