Question

Price elasticity of supply for a commodity is $5$. When price of the commodity rises from $Rs.9$ per unit to $Rs.10$ per unit, supply rises by $25$ units. Calculate quantity supplied at $9$ per unit.

Answer 1

Let us assume that initially quantity supplied $=Munits$.
Given, $P=Rs.9;P_1=Rs.10;△P=P_1-P=Rs.10-Rs.9=Rs.1$
$Q=Munits;△Q=25units$
$E_S=5$
Price elasticity of supply $\left(E_S\right)=\frac{P}{Q}\times \frac{△Q}{△P}$
$5=\frac{9}{M}\times \frac{25}{1}\Rightarrow 5M=25$
Or, $M=\frac{225}{5}=45$
Quantity supplied at $Rs.9$ per unit $=45units$.