Question

Calculate the elasticity of supply if a 15 %increase in the price of soya bean oil increases its supply from 300 to 345 units.

Answer 1

Answer:

Percentage of elasticity of supply= 1

Explanation:

Price of elasticity of supply = $\frac {percentage of change in quantity supplied }{ percentage of change in price }$

Then,

Percentage in change of quantity supplied= $\frac{quantity at end-quantity at start}{quantity start}$×100

= $\frac {345-300}{ 300 }$×100 =$\frac{45}{300}$×100=15%

Percentage change in price is given =15%

Hence, elasticity of supply = $\frac {15 }{ 15 }$ = 1.

#SPJ3

Answer 2

Answer:

Explanation:

Elasticity of supply refers to percentage change in quantity supplied due to percentage change in price.

$Es= \frac{Percentage change in quantity}{percentage change in supplied}\\ % change in Quantity =\frac{New Qunatity-Original Quantity}{Original Qunatity}$

$Percentage change in Quantity = \frac{New Qunatity - Original}{Original Qunatity}$

Here, New Quantity =  345 units

Original Quantity = 300 units

$Percentage change in quantity = \frac{345-300}{300}*100$

Percentage Change in quantity = 15%

$Es = \frac{15}{15} \\Es= 1$

Here the value of Es is 1 which means unitary elasticity of supply

#SPJ2