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A Producer Supplies 80 Units of a Good at a Price of Rs 10 per Unit. Price Elasticity of Supply is 4. How Much Will He Supply at Rs 9 per Unit? - CBSE (Arts) Class 12 - Economics

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Question

A producer supplies 80 units of a good at a price of Rs 10 per unit. Price elasticity of supply is 4. How much will he supply at Rs 9 per unit?

Solution

Given that

Q0 = 80 units

P0 = Rs 10

Es = 4

P1 = Rs 9

ΔP = P1 - P0

ΔP = 9 - 10 = -1

ΔQ = Q1 - Q0

ΔQ = Q1 - 80

we know that

`E_s=(DeltaQ)/(DeltaP)xxP_0/Q_0`

`4=(Q_1-80)/-1xx10/80`

`4=(Q_1-80)/-8`

-32 = Q1 - 80

Therefore, Q1 = 48 units

48 units of a good will be supplied by a producer at Rs 9 per unit.

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Solution A Producer Supplies 80 Units of a Good at a Price of Rs 10 per Unit. Price Elasticity of Supply is 4. How Much Will He Supply at Rs 9 per Unit? Concept: Concept of Supply.
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