Question

producer produces 100 units of a commodity at the rate of 10 per unit is the price decreases 2 rupees 5 per unit if the price elasticity of supply of the commodity is to how many units will be produced by the producer at the reduced rate​

Answer 1

Given Q=50units;Q

1

=35units;

ΔQ=Q

1

−Q=(35−50)=(−)15units

P=Rs.8;E

s

=1.6

Price elasticity of supply E

s

=

Q

P

×

ΔP

ΔQ

1.6=

50

8

×

ΔP

−15

1.6=

50ΔP

−120

ΔP=

50×1.6

−120

=−1.5

New price =Rs.8−Rs.1.5=Rs.6.5