Advertisements
Advertisements
Question
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 ______.
Options
10
Greater than 10
Le.sser than 10
1
Advertisements
Solution
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 10.
Explanation:
The price elasticity of supply (Es) is calculated as:
Es = `("Percentage change in quantity supplied")/("Percentage change in price")`
1 = `("Percentage change in quantity supplied")/(10%`
Therefore, the percentage change in quantity supplied must also be 10% for the elasticity to equal 1.
APPEARS IN
RELATED QUESTIONS
Define a relatively elastic supply.
Identify the elasticity of supply for the following with proper reasoning:
Primitive and advanced technology.
What is the degree of elasticity of supply in the diagram?
If price elasticity of supply is greater than 1, then supply is said be elastic.
Choose the correct term for the given definition.
The ratio between the percentage change in supply to a percentage change in price.
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 ______.
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?
With the help of a formula calculate the elasticity of supply from the following table:
| Price | Quantity supplied |
| 10 | 200 |
| 15 | 225 |
The quantity of a commodity supplied increases by 25% when its price rises by 10%. Calculate price elasticity of supply.
Define price elasticity of supply.
Draw the supply curve showing price elasticity of supply equal to one.
Draw the supply curve showing price elasticity of supply less than one.
Draw and explain the following degree of elasticity of supply.
Ep > 1
If the price of a commodity falls by 10% and consequently, the quantity supplied decreases by 20%, what will be its elasticity of supply?
Price elasticity of supply of a good is 0.8. Is the supply 'elastic' or 'inelastic', and why?
Why is the supply of eggs inelastic?
Draw a straight line supply curve of the following situation.
More than unitary elastic
Draw relatively inelastic supply.
