Q2- If the price of a commodity increases from Rs 40 to Rs 44, as a result Quantity supplied increases by 1000 units. Assuming price elasticity Of supply 0.5, Calculate initial quantity supplied and new quantity supplied.
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P₁=40
p₂=44
%change in price= 44-40/40 *100
=10%
q1=q1
q2=q1+1000
%change in quantity supplied= q1+1000-q1/ q1 *100
=100000/q1 %
price elasticity of supply= 0.5
%change in quantity supplied/ %change in price =0.5
(100000/q1)/10=0.5
100000/q1=5
q1=100000/5
=20000 units
q2= 20000+1000 =21000 units
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