Question

A produced earns
Rs500 when price
of the good is Rs10 peronit. when prices
tires by 50% her Supplies 50% more
Calculate
price rises by 50% he supplies 50% more. calculate price
eleasticity of Supply.​

Answer 1

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Given P=Rs.5; P =Rs.10;

ΔP=P1−P

=Rs.10−Rs.5

=Rs.5

When price =Rs.5, total revenue (P×Q)=Rs.50

Quantity supplied Q= 550 =10units

When price =Rs.10, total revenue (P1 ×Q1 )

=Rs.100

New quantity supplied Q1

=10100

=10units

Q=10units;Q1

=10units

ΔQ=QQ −Q=(10−1)

=0units