Advertisements
Advertisements
Question
If the price of a commodity falls by 10% and consequently, the quantity supplied decreases by 20%, what will be its elasticity of supply?
Advertisements
Solution
Price elasticity of supply (Es) = `("Percentage change in quantity supplied")/("Percentage change in price")`
= `(20%)/(10%)`
= 2
RELATED QUESTIONS
Explain briefly the impact of the cost of production on the elasticity of supply.
What is the formula for percentage method of calculating price elasticity of supply?
Explain any three factors affecting elasticity of supply.
What is the degree of elasticity of supply in the diagram?
When price of a·product rises by 10% its quantity supplied also rises by 10%. Find out price elasticity.
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 an entrepreneur introduces a new technique or a new product, it is called ______.
Elasticity of supply is measured by:
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 I:
| 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:
Price of a product increases by 2%. As a result, its supply rises by 4%. What is elasticity of supply of the commodity?
Price elasticity of supply is likely to be ______ in the long run.
Cotton and cotton seeds are examples of ______ supply.
Draw and briefly explain a perfectly inelastic supply curve.
Draw and briefly explain a perfectly elastic supply curve.
How is elasticity of supply measured according to the percentage method?
Give the meaning of perfectly inelastic supply.
Draw the supply curve showing price elasticity of supply less than one.
Draw and explain the following degree of elasticity of supply.
Ep > 1
What is meant by elasticity of supply?
What is meant by inelastic supply?
What do you mean by elastic supply?
What do you mean by perfectly inelastic supply?
Explain the percentage method of measuring price elasticity of supply.
Draw relatively inelastic supply.
