A t-shirt maker would be willing to supply 75 t-shirts per day at a price of $18.00 each. At a price of $20.00, the t-shirt maker would be willing to supply 100 t-shirts. Using the midpoint method, the price elasticity of supply for t-shirts is about a. 0.37, and supply is elastic. b. 0.37, and supply is inelastic. x. 2.71, and supply is elastic. d. 2.71, and supply is inelastic.

c. 2.71, and supply is elastic.

Explanation:

The formula to compute the price elasticity of supply is shown below:

Price elasticity of supply = (Percentage change in quantity supplied ÷ percentage change in price)        

where,  

Change in quantity supplied is

= Q2 - Q1

= 100 t-shirts - 75 t-shirts

= 25 t-shirts

And, an average of quantity supplied is

= (100 + 75) ÷ 2

= 87.5

Change in price is

= P2 - P1

= $20 - $18

= $2

And, the average of price is

= ($20 + $18) ÷ 2

= 19

So, after solving this, the price  elasticity of supply  is 2.71

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