Ana is a stay-at-home parent who lives in Dallas and provides math tutoring for extra cash. At a wage of $25 per hour, she is willing to tutor 4 hours per week. At $40 per hour, she is willing to tutor 10 hours per week. Using the midpoint method, the elasticity of Beth's labor supply between the wages of $25 and $40 per hour is approximately ( ), which means that Beth's supply of labor over this wage range is ( ).

1.86 and elastic

Explanation:

The computation of the price elasticity of supply using the mid point method is shown below:

= (change in quantity supplied ÷ average of quantity supplied) ÷ (percentage change in price ÷ average of price)  

where,  

Change in quantity supplied is

= Q2 - Q1

= 10 - 4

= 6

And, average of quantity supplied is

= (10 + 4) ÷ 2

= 7

Change in price would be

= P2 - P1

= $40 - $25

= $15

And, average of price would be

= ($40 + $25) ÷ 2

= 32.5

So, after solving this, the price elasticity of supply is 1.86

Since the price elasticity is more than one so it is a elastic

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