Question

7, As a result of 20% rise in the price of a commodity, its supply increases by 30%. Calculate the elasticity
E,
1.5)​

Answer 1

Answer:

Given percentage change in price =10 percent

Q=200units;Q1=225units;

ΔQ=Q1−Q=225−200)=25units

Percentage change in quantity supplied =QΔQ×100=20025×100=12.5percent

Price elasticity of supply Es=PercentagechangeinpricePercentagechangeinquantitysupplied=10percent12.5percent=1.25 percent

Price elasticity of supply =1.25

Explanation:

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