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Question
State and explain the elasticity of supply.
Solution
The elasticity of supply may be defined as the degree of responsiveness of change in supply to change in price on the part of sellers.
Mathematically:
Elasticity Of supply = `"Proportionate change in supply"/"Proportionate change in price"`
Es = `"ΔQs"/"ΔPs"xx"P"/"Q"`
Q – Supply, p – price, ∆ – change.
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