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Question
State and explain the elasticity of supply.
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Solution
The elasticity of supply may be defined as the degree of responsiveness of change in supply to change in price on the part of sellers.
Mathematically:
Elasticity Of supply = `"Proportionate change in supply"/"Proportionate change in price"`
Es = `"ΔQs"/"ΔPs"xx"P"/"Q"`
Q – Supply, p – price, ∆ – change.
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