When price of a commodity falls from Rs. 12 per unit to Rs. 9 per unit – InterviewSolution

InterviewSolution

1.	When price of a commodity falls from Rs. 12 per unit to Rs. 9 per unit, the producer supplies `75%` less output. Calculate price elasticity of supply.
Answer» `P.e_(S)=(%DeltaQ_(x))/(%DeltaP_(x))` `{:(" P 12"),(" P"_(1)" 9"),(ulbar(DeltaP-3)):}" "%DeltaP=(DeltaP)/(P)xx100=(-3)/(12)xx100=(-)25%` `P.e_(s)=((-)75%)/((-)25%)=3" Ans."P.e_(S)=3`

Discussion

No Comment Found

Related InterviewSolutions

Price elasticity of supply is 2.5. At a price of Rs.5/unit its quantity supplied is 300 units. Calculate the quantity supplied at a price of Rs.4/unit.
Due to decrease in price form Rs. 15/unit to Rs.10/unit, supply of a commodity falls from 100 units to 50 units. Find price elasticity of supply.
If price of a commodity falls from Rs.60/unit to Rs.58/unit, its supply falls from 400 units to 300 units. Find out elasticity of supply.
What is meant by increase in supply?
When price of a commodity falls from Rs. 12 per unit to Rs. 9 per unit, the producer supplies `75%` less output. Calculate price elasticity of supply.
If price of a commodity falls from Rs.50/unit, supply also falls from 400 units to 200 units. Calculate price elasticity of supply.
Distinguish between change in supply and change in quantity supplied of a commodity.
At Rs.12/unit, quantity supplied of a commodity is 500 units. When its price riese to Rs.15/unit, its quantity supplied rises to 650 units. Calculate price elasticity of supply. Is supply elastic ?
State three causes of increase in supply.
The price elasticity of supply of commodities X and Y is equal. The price of X falls from Rs.10 to Rs.8 per unit and supply falls by 16 percent. The price of Y rises by `10%`. Calculate the percentage increase in the supply.