Due to a 10 percent rise in the price of a commodity , its quantity supplied rises from 400 units to 450 units. Calculate its price elasticity of supply. Is its supply elastic ?

Due to a 10 percent rise in the price of a commodity , its quantity su

1.	Due to a 10 percent rise in the price of a commodity , its quantity supplied rises from 400 units to 450 units. Calculate its price elasticity of supply. Is its supply elastic ?
Answer» Solution :`E_(s)=(%"Change in supply")/(% "Change in PRICE ")=((50)/(400)XX100)/(10)=((25)/(2))/(10)=(25)/(10)=1.25` Supply is elastic because `E_(s) gt 1`.