Advertisements
Advertisements
Question
A 10 per cent increase in price of a good causes 5 per cent increase in its quantity supplied, elasticity of supply will be ______.
Options
Inelastic
Elastic
Perfectly elastic
Perfectly inelastic
Advertisements
Solution
A 10 per cent increase in price of a good causes 5 per cent increase in its quantity supplied, elasticity of supply will be inelastic.
Explanation:
Elasticity of supply is calculated as the percentage change in quantity supplied divided by the percentage change in price.
Elasticity of Supply (Es) = `("Percentage change in quantity supplied")/("Percentage change in price")`
Es = `(5%)/(10%)` = 0.5
Since the elasticity of supply is less than 1 (Es = 0.5), the supply is considered inelastic.
RELATED QUESTIONS
Define a relatively elastic supply.
Identify the elasticity of supply (es) of S1, S2 and S3 supply curves:
What is the formula for percentage method of calculating price elasticity of supply?
Identify the value of elasticity of supply for the supply curve OS and S1S2.
Identify the elasticity of supply for the following with proper reasoning:
Short run and long run period.
Identify the elasticity of supply for the following with proper reasoning:
Perishable and durable goods.
- Price elasticity of supply of a good is 0.8, its supply is said to be inelastic.
- If the quantity supplied of a commodity remain the same whatever its price supply is said to perfectly inelastic.
The given diagram is a case of ______ supply.
If the price elsaticity of supply is 1 and the percentage change in price is 10, then the percentage change in quatity supplied should be ______.
When the percentage change in the quantity supplied of a commodity is exactly equal to the percentage change in its price it is known as ______.
A linear supply curve starting from the origin making an angle of 75 degree with X-axis will have ______.
Identify the correct sequence of alternatives given in Column II by matching them with respective terms in Column:
| Column I | Column II |
| A. Perfectly Inelastic | (i) Es > 1 |
| B. Perfectly Elastic | (ii) Es < 1 |
| C. Inelastic | (iii) Es = 0 |
| D. Highly Elastic | (iv) Es = infinity |
Choose the correct alternative:
When is the supply of a commodity is called elastic?
The coefficient of elasticity of a commodity is 0.4. What percentage change in supply will take place if its price rises 20%?
Price elasticity of supply is likely to be ______ in the long run.
When there is no change in price, but quality supplied changes, it implies a situation of ______.
Draw and briefly explain a perfectly inelastic supply curve.
Draw the supply curve showing price elasticity of supply greater than one.
Draw the supply curve showing price elasticity of supply less than one.
Indicate the degree of elasticity on the supply curve given below:
What is meant by elasticity of supply?
Why does the measure of pnce elasticity of supply of a good carry plus sign?
What is meant by inelastic supply?
What do you mean by elastic supply?
Why is the supply of eggs inelastic?
Explain the percentage method of measuring price elasticity of supply.
Define a relatively inelastic supply.
