Question

4. Price of a commodity increases by 4 per unit and due to this, its supply increases from 60 units to
90 units. Calculate elasticity of supply, if the original price was 6 per unit.
1E = 075
5. When market price of a commodity is 4 per unit, a seller is willing to sell 50 units of the commodity. As
the price rises to 5 per unit, he is willing to sell 60 units. Calculate the seller's elasticity of supply.
E = 08
6. Calculate the elasticity of supply, when price rises from * 2 per unit to 3 per unit and supply rise
from 20 units to 30 units.
(E-
Calculation of Flasticity of Supply by Percentage Method​

Answer 1

Answer:

Price elasticity of supply = % change in quantity supplied / % change in price

Therefore, Price elasticity of supply= ((120-100)/(120+100))*( (5-4)/(5+4))

= 0.80

Since, price elasticity of supply is less than 1, supply of this commodity is inelastic. This means that a shift in price won't drastically affect the supply of the commodity.

Explanation:

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