Advertisements
Advertisements
Question
When price of a good falls from Rs 20 to Rs 10 per unit, producer reduces supply from 100 units to 50 units. Calculate price elasticity of supply.
Solution
Given that
Q0 = 100 units and Q1 = 50 units
P0 = Rs 20 and P1 =Rs 10
ΔP = P1 - P0
ΔP=10-20=-10
ΔQ = Q1 - Q0
ΔQ = 50 - 100=-50 units
We know that
`E_s = (DeltaQ)/(DeltaP)xxP_0/Q_0`
`=(-50)/-10xx20/100`
`=5xx1/5=1`
APPEARS IN
RELATED QUESTIONS
Individual supply and Market supply.
When price of a commodity falls from Rs 12 per unit to Rs 9 per unit, the producer supplies 75 percent less output. Calculate price elasticity of supply.
What is perfectly elastic supply?
When price of a good raises 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.
What is supply?
Supply is inversely related to price.
Give one reason for an “increase” in supply of a commodity.
State the components of supply of money.
State whether the following statement is true or false :
Supply of perishable goods is inelastic.
State whether the following statement is true or false :
Under perfect competition price is determined by equilibrium of demand and supply.
Explain with reason, whether you agree or disagree with the following statement:
There is direct relationship between price and quantity supplied.
Fill in the blank with appropriate alternatives given in the bracket:
________ is one of the determinants of aggregate supply.
Fill in the blank with appropriate alternative given below
The vertical supply curve represents _____________ elasticity.
State whether the following statement is TRUE and FALSE.
Geometric Method is also known as Point Method.
State whether the following statement is TRUE and FALSE.
Total Cost is the total expenditure incurred by a firm.
Define or explain the following concept:
Output
Answer the following about 200 to 250 words
State and explain the law of supply. What are the exceptions to this law?
Choose the correct alternative from given options:
The coefficient of price elasticity of supply of a good is 3. It is known as ___________.
Identify & explain the concept from the given illustration.
Amar sells 50 dozens of mangoes daily at ₹ 300/- per dozen.
