The price elasticity of supply of a commodity is 2.5 . At a price of Rs. 5 per unit, its quantity supplied is 300 units. Calculate its quantity supplied at a price Of Rs. 4 unit.

The price elasticity of supply of a commodity is 2.5 . At a price of R

1.	The price elasticity of supply of a commodity is 2.5 . At a price of Rs. 5 per unit, its quantity supplied is 300 units. Calculate its quantity supplied at a price Of Rs. 4 unit.
Answer» Solution :`E_(s)=(P)/(Q_(s))XX(DeltaQ_(s))/(DELTAP)` `2.5=(5)/(300)xx(DeltaQ_(s))/(-1)` `-750=5DeltaQ_(s)` `DeltaQ_(s)=-150` New `Q=Q_(s)+ DeltaQ=300+(-150)=300-150=150` units