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Question
Find the elasticity of supply when the supply function is given by x = 2p2 + 5 at p = 1.
Solution
Given x = 2p2 + 5
Differentiating with respect to 'p' we get,
`"dx"/"dp"` = 4p
Elasticity of Supply
`eta_s = "p"/x * "dx"/"dp"`
`=> eta_s = "p"/(2"p"^2 + 5)`(4p)
`= (4"p"^2)/(2"p"^2 + 5)`
when p = 1, `eta_s = (4(1)^2)/(2(1^2) + 5) = 4/(2 + 5) = 4/7`
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