The price elasticity of supply of a commodity is $2.5$ . At a price of $R s . 5$ per unit, its quantity supplied is $300$ units. Calculate its quantity supplied at a price of $R s . 4$ per unit.

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Solution

Suppose, quantity supplied (when price $= R s . 4$ per unit) $= M u n i t s$ .
$P = R s . 5; P_{1} = R s . 4; △ P = P_{1} - P = R s . 4 - R s . 5 = (-) R s . 1$
$Q = 300 u n i t s; Q_{1} = M u n i t s; △ Q = Q_{1} - Q = (M - 300) u n i t s$
$E_{S} = 2, 5$
Price elasticity of supply $(E_{S}) = \frac{P}{Q} \times \frac{△ Q}{△ P}$
$= \frac{5}{300} \times \frac{M - 300}{- 1}$
$2.5 = \frac{1}{60} \times \frac{M - 300}{- 1} \Rightarrow 150 = \frac{M - 300}{- 1}$
$- 150 = M - 300 \Rightarrow M = - 150 + 300 = 150$
Quantity supplied $= 150 u n i t s$ .

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The price elasticity of supply of a commodity is 2.5. At a price of Rs.5 per unit, its quantity supplied is 300 units. Calculate its quantity supplied at a price of Rs.4 per unit.

The price elasticity of supply of a commodity is $2.5$ . At a price of $R s . 5$ per unit, its quantity supplied is $300$ units. Calculate its quantity supplied at a price of $R s . 4$ per unit.