The market price of a good changes from Rs 5 to Rs 20. As a result, the quantity supplied by a firm increases by 15 units. The price elasticity of the firm’s supply curve is 0.5. Find the initial and final output levels of the firm.
Answers
Answered by
3
Explanation:
5+20=25 hope you can help you
Answered by
14
Answer:
25
Explanation:
Change in quantity = 15 units (Given)
Change in price = Rs. 15 (Given)
Therefore,
The proportionate change in Price
= 15/5
= 3
0.5 = Proportionate change in the quantity supplied / 3
Proportionate change in the quantity supplied = 0.5 × 3
= 1.5
Proportionate change in the quantity supplied = 15/x = 1.5
= x = 15 / 1.5 = 10
Supply at a base price of Rs 5 = 10
Therefore,
New supply at the price of 20 will be
= 10 + 15
= 25
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