Price elasticity of supply of a good is 5 . A producer sells units 500 units of this good at Rs.5 per unit . How much will be willing to sell at Rs. 6 per unit ?

Price elasticity of supply of a good is 5 . A producer sells units 500

1.	Price elasticity of supply of a good is 5 . A producer sells units 500 units of this good at Rs.5 per unit . How much will be willing to sell at Rs. 6 per unit ?
Answer» <P> Solution :`E_(s)=(P)/(Q)xx(DELTAQ)/(DeltaP)` `5=(5)/(500)xx(DeltaQ)/(1)` `DeltaQ=500` New `Q=Q+DeltaQ=500+500=1000` units