The coefficient of price elasticity of supply ($ES$) measures how the quantity supplied of a good responds to a change in its price. The midpoint formula for elasticity is given by:

$ES = \frac{(Q_2 - Q_1)}{(Q_2 + Q_1)/2} \div \frac{(P_2 - P_1)}{(P_2 + P_1)/2}$

Where:

• $Q_1$ and $Q_2$ are the initial and new quantities supplied.
• $P_1$ and $P_2$ are the initial and new prices.

For this problem:

• Initial price, $P_1 = 20$
• New price, $P_2 = 22$
• Initial quantity, $Q_1 = 1000$
• New quantity, $Q_2 = 1200$

Let's compute $ES$ using the formula.

$ES = \frac{(1200 - 1000)}{(1200 + 1000)/2} \div \frac{(22 - 20)}{(22 + 20)/2}$

Calculating step-by-step.The coefficient of price elasticity of supply for Goldsboro's apples, using the midpoint approach, is $ES = 1.91$.

Would you like more details or have any questions? Here are five related questions to consider:

1. What does an elasticity coefficient greater than 1 imply about the supply of apples?
2. How would the elasticity change if the price increase were larger or smaller?
3. What are some factors that could influence the elasticity of supply for agricultural products?
4. How does the concept of elasticity help businesses make production decisions?
5. How does supply elasticity differ from demand elasticity?

Tip: The midpoint formula is often used because it provides a more accurate measure of elasticity, particularly when there are large changes in price or quantity.