Question

when the price of good rises from rs 8 per unit to 10 per unit producer supplies 40 units more price elasticity of supply is 2 . what is the quantity supplied before the price changes? calculate. ​

Answer 1

Change in quantity supplied : 40 units

Price elasticity of supply = 2

Change in Price= p2 - p1

                         = 10 - 8

                         = 2

Original quantity = x

Price Elasticity of supply = $\frac{change.in.quantity.supplied}{change.in.price} *\frac{P}{Q}$

$2 =\frac{40}{2} *\frac{8}{Q}\\2 = \frac{160}{Q} \\2Q= 160\\Q = \frac{160}{2}\\Q = 80$

The quantity supplied before the price change was 80 units