At the market price of Rs 10, a firm supplies 4 units of output. The market price increases to Rs 30. The price elasticity of the firm’s supply is 1.25. What quantity will the firm supply at the new price?

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is C
14

Given that
$p_{0} = R s 10, p_{1} = R s 30, q_{0} = 4, ϵ_{s} = 0.5, Δ p = p_{1} - p_{0} = R s 20$

$ϵ_{s} = \frac{Δ q}{Δ p} \times \frac{p_{0}}{q_{0}} ϵ_{s} = \frac{Δ q}{20} \times \frac{10}{4} = 1.25 Δ q = \frac{1.25 \times 4 \times 20}{10} Δ q = 10 q_{1} = q_{0} + Δ q = 14$

Suggest Corrections

Similar questions

At the market price of Rs. 10, a firm supplies 4 units of output. The market price increases to Rs. 30. The price elasticity of the firm's supply is 1.25. What quantity will the firm supply at the new price?

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 final output levels of the firm.

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.

A firm earns a revenue of Rs. 50 when the market price of a good is Rs. 10. The market price increases to Rs. 15 and the firm now earns a revenue of Rs. 150. What is the price elasticity of the firm's supply curve?

A firm earns a revenue of Rs 50 when the market price of a good is Rs 10. The market price increase to Rs 15 and the firm now earns a revenue of Rs 150. What is the price elasticity of the firm’s supply curve?

Join BYJU'S Learning Program

At the market price of Rs 10, a firm supplies 4 units of output. The market price increases to Rs 30. The price elasticity of the firm’s supply is 1.25. What quantity will the firm supply at the new price?

The correct option is C 14 Given that p0=Rs 10, p1=Rs 30, q0=4,ϵs=0.5, Δp=p1−p0=Rs 20 ϵs=ΔqΔp×p0q0ϵs=Δq20×104=1.25Δq=1.25×4×2010Δq=10q1=q0+Δq=14