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Question
Find the elasticity of supply for the supply function x = 2p2 + 5 when p = 3.
Solution
x = 2p2 + 5
`"dx"/"dp" = 2 xx 2p + 0 = 4p`
Elasticity of supply: ηs = `"p"/x * "dx"/"dp"`
`= "p"/(2"p"^2 + 5) xx 4"p"`
`= "4p"^2/(2"p"^2 + 5)`
When p = 3, elasticity of supply, ηs = `(4 xx 3^2)/(2(3)^2 + 5)`
`= (4 xx 9)/(18 + 5)`
`= 36/23`
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