When price of a good rises from $R s . 12$ per unit to $R s . 15$ per unit the producer supplies $50$ per cent more output. What is the price elasticity of supply? Calculate.

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Solution

Given, percentage change in quantity supplied $= 50$ %
$P = R s . 12; P_{1} = R s . 15; △ P = P_{1} - P = R s . 15 - R s . 12 = R s . 3$
Percentage change in price $= \frac{△ P}{P} \times 100$
$= \frac{3}{12} \times 100 = 25 %$
Price elasticity of supply $(E_{S}) = \frac{Percentage change in quantity supplied}{Percentage change in price}$
$= \frac{50 %}{25 %} = 2$
Price elasticity of supply $= 2$ .

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When price of a good rises from Rs.12 per unit to Rs.15 per unit the producer supplies 50 per cent more output. What is the price elasticity of supply? Calculate.

Given, percentage change in quantity supplied =50%P=Rs.12;P1=Rs.15;△P=P1−P=Rs.15−Rs.12=Rs.3Percentage change in price =△PP×100=312×100=25%Price elasticity of supply (ES)=Percentage change in quantity suppliedPercentage change in price=50%25%=2Price elasticity of supply =2.

When price of a good rises from $R s . 12$ per unit to $R s . 15$ per unit the producer supplies $50$ per cent more output. What is the price elasticity of supply? Calculate.