Question

2009)
27. A firm supplies 500 units of a good at a given price. Price elasticity of supply is 4. When
price rises by 1 the firm supplies 1000 units. What is the given price? Calculate.
[Ans. P = 4]Delhi​

Answer 1

Answer:

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Answer 2

Explanation:

Given A firm supplies 500 units of a good at a given price. Price elasticity of supply is 4. When  price rises by 1 the firm supplies 1000 units. What is the given price?

• Given a firm supplies 500 units of a good at a given price.

• So let the given price be x
• Price elasticity of supply Es = 4
• So when price rises by 1 that is x + 1, firm supplies 1000 units.
• So Es = ΔQ / ΔP x P/Q                    (ΔQ = New quantity – old quantity
•                                                                 = 1000 – 500
•                                                                  = 500 units)
•                                                          (ΔP = New price – old price
•                                                                 = x + 1 – x
•                                                                   = 1)
• So 4 = 500 / 1  x  x / 500
• So x = 4 Rs
• So the given price is Rs 4

Reference link will be

https://brainly.in/question/28217088

https://brainly.in/question/11898135