A seller supplies 100 Kg of rice at price ₹25 It is found that pri

1.	A seller supplies 100 Kg of rice at price ₹25 It is found that price elasticity of supply is 2. At what price he will be ready to sell 150 Kg of rice?
Answer» Price elasticity of supply is defined as the degree of responsiveness of change in supply due to change in price. That is, Es = \(\frac{Percentage\,change\,in\,supply}{Percentage\,change\,in\,Price}\) Symbolically,Es = \(\frac{ΔQ}{ΔP}\times\frac{P}{Q}\) In the given example, Es = 2, ΔQ = 50, Q = 100, P = 25 Therefore,2 = \(\frac{50}{ΔP}.\frac{25}{100}\) ΔP = \(\frac{50\times25}{100\times2}\) = 6.25 Therefore, new price = 25 + 6.25 = 31.25

A seller supplies 100 Kg of rice at price ₹25 It is found that price elasticity of supply is 2. At what price he will be ready to sell 150 Kg of rice?

Answer»

Price elasticity of supply is defined as the degree of responsiveness of change in supply due to change in price. That is,

Es = \(\frac{Percentage\,change\,in\,supply}{Percentage\,change\,in\,Price}\)

Symbolically,Es = \(\frac{ΔQ}{ΔP}\times\frac{P}{Q}\)

In the given example,

Es = 2, ΔQ = 50, Q = 100, P = 25

Therefore,2 = \(\frac{50}{ΔP}.\frac{25}{100}\)

ΔP = \(\frac{50\times25}{100\times2}\) = 6.25

Therefore, new price = 25 + 6.25 = 31.25