Question

Find elasticity of supply when price increases by $20$ per cent and quantity increases from $100$ to $250$ units of the commodity.

Answer 1

Percentage change in price $=20\%$
Percentage change in quantity supplied $=\frac{△Q}{Q}\times 100$
$=\frac{250-100}{100}\times 100=\frac{150}{100}\times 100=150\%$
Elasticity of supply $\left(E_S\right)=\frac{\text{Percentage change in quantity supplied}}{\text{Percentage change in price}}$
$=\frac{150\%}{20\%}=7.5\left(elastic\right)$
Elasticity of supply $=7.5$.