Ashoe factory has an elasticity of supply of .5 as the price of shoes rises from $50 to $75. if the factory produced 100,000 shoes at a market price of $50, how many will be produced at the new price? 75,000 200,000 125,000 400,000

The correct answer from the given options is "125,000".

E S (elasticity of supply) = .5 
( supply is inelastic: E S < 1 )

Now we use the following formula:

E S = Δ Q / Δ P * P / Q

Δ Q = change in quantity
Δ P = change in price
P = initial price
Q = initial quantity.
now put the values;
.5 = Δ Q / 25 * 50 / 100,000

Δ Q = .5 * 25 * 100,000 / 5

Δ Q = 25,000

Quantity at the new price = Q ( new ) = 100,000 + 25,000
= 125,000