Question

At a price of Rs5 per unit of a commodity, total revenue is Rs 800. When its price rises by 20 percent, total revenue increase by Rs 400. Calculate price elasticity of supply.

Answer 1

Explanation:

the quantity supplied changed by 20 units (meaning very specifically there was only a movement along an existing demand curve) then the answers given (.8 meaning it is inelastic) are correct. If you meant the equilibrium prices and quantities were the two (P,Q) points you identified then no you can’t calculate the price elasticity of supply from the information given.