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Standard XI

Economics

Price Elasticity of Supply

The quantity ...

Question

The quantity supplied of a commodity at a price of Rs 8 per unit is 400 units. Its price elasticity of supply is 2. Calculate the price at which its quantity supplied will be 600 units.

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Solution

Given: $E_{s} = 2,$ P=8, Q=100, $P_{1} = ? Q_{1} = 600$
$E_{s} = \frac{Δ Q_{s}}{Δ P} . \frac{P}{Q_{s}}$
Substituing the values, we get
$2 = \frac{200}{Δ P} \times \frac{8}{400}$
$∴ Δ P = \frac{200 \times 8}{2 \times 400} = 2$
New price = $P + Δ P = 8 + 2 = R s . 10$

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The quantity supplied of a commodity at a price of Rs 8 per unit is 400 units. Its price elasticity of supply is 2. Calculate the price at which its quantity supplied will be 600 units.

Given: Es=2, P=8, Q=100, P1=? Q1=600 Es=ΔQsΔP.PQs Substituing the values, we get 2=200ΔP×8400 ∴ΔP=200×82×400=2 New price = P+ΔP=8+2=Rs.10

Given: $E_{s} = 2,$ P=8, Q=100, $P_{1} = ? Q_{1} = 600$
$E_{s} = \frac{Δ Q_{s}}{Δ P} . \frac{P}{Q_{s}}$
Substituing the values, we get
$2 = \frac{200}{Δ P} \times \frac{8}{400}$
$∴ Δ P = \frac{200 \times 8}{2 \times 400} = 2$
New price = $P + Δ P = 8 + 2 = R s . 10$