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

Answer:

Given, P=Rs.10; P1 = Rs.8; 

△P=P1−P=Rs.8−Rs.10=(−)Rs.2

Ed=(−)2

Percentage change in price = P△P×100

=10−2×100=(−)20 per cent

Price elasticity of demand (Ed)=PercentagechangeinpricePercentagechangeinquantitydemanded

−2=−20%Percentagechangeinquantitydemanded

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

Percentage increase in quantity demanded = 40%