Question

Calculation of Price or Quantity (When Elasticity of supply is given)
18 The coefficient of elasticity of supply of a commodity is 3. A seiler supplies 20 units of this commootty
at a price of 8 per unit. How much quantity of this commodity will the seller supply when the price
nises by 2 per unit?​

Answer 1

Answer:

Price elasticity measures the responsiveness of the quantity demanded or supplied of a good to a change in its price. It is computed as the percentage change in quantity demanded—or supplied—divided by the percentage change in price.

If the quantity supplied is zero below some price but infinite above that price, it is perfectly elastic supply; the supply curve is a horizontal line. The price elasticity of supply depends on time and on the availability of resources to expand production

Explanation:

The price elasticity of supply = % change in quantity supplied / % change in price. When calculating the price elasticity of supply, economists determine whether the quantity supplied of a good is elastic or inelastic. PES > 1: Supply is elastic. PES < 1: Supply is inelastic.