The price elasticity of supply of a commodity is 2. When its price falls from Rs. 10 to Rs. 8 per unit, its quantity supplied falls by 500 units . Calculate the quantity suppliedat the reduced price.

The price elasticity of supply of a commodity is 2. When its price fal

1.	The price elasticity of supply of a commodity is 2. When its price falls from Rs. 10 to Rs. 8 per unit, its quantity supplied falls by 500 units . Calculate the quantity suppliedat the reduced price.
Answer» SOLUTION :`E_(s)=(P)/(Q)xx(DeltaQ)/(DeltaP),2=(10)/(Q)xx(-500)/(-2),4Q=5000,Q=1250` Supply at `RS 8=Q+ DeltaQ=1250 +(-500)=750` units.