Question

If the quantity supplied of a commodity increases from 1,000 units to 1,500 units when price rises from ₹40 to ₹50, what is the price elasticity of supply?

Options

• 0.5

• 1

• 2

• 3

Answer 1

2

Explanation:

Using the percentage method, Es = (500/1,000) / (10/40) = 0.5 / 0.25 = 2.