Question

Q29. A producer supplies 200 units of a good at 10 per unit. Price elasticity of supply is 2
How many units will the producer supply if the price rises by 10%?
3​

Answer 1

q1=200

p1=10

Ps=2

%change in price= p2-10/10 *100

10= 10(p2-10)

p2-10=1

p2=11

q2=?

%age change in q= (q2-200)/200 *100

= q2-200 / 2 %

Ps= %age change in q/ %age change in price

2= ((q2-200)/2) / 10

20= q2-200 / 2

40= q2-200

q2= 240 units