The price of a commodity is Rs.12 per unit and its quantity supplied is 500 units. When its price rises to Rs. 15 per unit , its quantity supplied rises to 650 units. Calculate its price elasticity of supply. Is supply elastic ?

The price of a commodity is Rs.12 per unit and its quantity supplied i

1.	The price of a commodity is Rs.12 per unit and its quantity supplied is 500 units. When its price rises to Rs. 15 per unit , its quantity supplied rises to 650 units. Calculate its price elasticity of supply. Is supply elastic ?
Answer» Solution :`E_(s)=(P)/(Q_(s))xx(DeltaQ_(s))/(DeltaP)=(12)/(500)xx(150)/(3)=1.2` Yes, the SUPPLY is elastic because `E_(s) GT 1`