Question

 With the rise in price by Rs.10, the quantity supplied changes from 80 units to 100 units. The price elasticity of supply is (+) 1.0. Find out the price before change.​

Answer 1

Given, P=Rs.10; P

1

= Rs.8;

△P=P

1

−P=Rs.8−Rs.10=(−)Rs.2

E

d

=(−)2

Percentage change in price =

P

△P

×100

=

10

−2

×100=(−)20 per cent

Price elasticity of demand (E

d

)=

Percentagechangeinprice

Percentagechangeinquantitydemanded

−2=

−20%

Percentagechangeinquantitydemanded

Percentage change in quantity demanded =(−)2×(−)20 per cent = 40 per cent

Percentage increase in quantity demanded = 40%.