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
With the help of a suitable diagram, explain the following degree of elasticity of supply.
Es = ∞
Draw a perfectly elastic supply curve.
Define a relatively elastic supply.
Identify the elasticity of supply (es) of S1, S2 and S3 supply curves:
Identify the elasticity of supply for the following with proper reasoning:
Primitive and advanced technology.
Identify the degree of elasticity of supply from the following graph:
What is the formula for percentage method of calculating price elasticity of supply?
Explain any three factors affecting elasticity of supply.
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:
Nature of the entrepreneurs.
What is the degree of elasticity of supply in the diagram?
When an entrepreneur introduces a new technique or a new product, it is called ______.
When the price increases by 50% and the supply increases only by 5% the price elasticity of supply of that commodity will be ______.
Elasticity of supply is measured by:
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 ______.
When is the supply of a commodity is called elastic?
Price of a product increases by 2%. As a result, its supply rises by 4%. What is elasticity of supply of the commodity?
If the price of a commodity increases by 50% and its supply increases by 25% then calculate the price elasticity of supply following the percentage method. Identify the degree of price elasticity.
Explain any four determinants of elasticity of supply.
Give the meaning of perfectly elastic supply.
Draw the supply curve showing price elasticity of supply greater than one.
Indicate the degree of elasticity on the supply curve given below:
Draw and explain the following degree of elasticity of supply.
Ep > 1
Identify and define the degree of price elasticity of supply from the diagram for the supply curves S1, S2, S3, S4.
What is meant by elasticity of supply?
If the price of a commodity falls by 10% and consequently, the quantity supplied decreases by 20%, what will be its elasticity of supply?
