Question

Suppose the price of a commodity is rupees 20 per unit. At this price the farm supplies hundred units of a commodity. If the price Rises to 24 rupees per unit the firm increases the supply to 140 units. Find out the price elasticity of supply? ​

Answer 1

Answer:

Given Q=5units;Q1=3units;

Δ=Q1−Q=(3−50=(−)1units

P=Rs.8;Es=1.6

Price elasticity of supply Es=QP×ΔPΔQ

1.=508×ΔP−15

1.=50ΔP−120

ΔP=50×1.6−120=−1.5

New price =Rs.8−Rs.1.5=Rs.6.5