When price of a good rises from Rs 8 per unit to Rs 10 per unit, producer supplies 40 units more. Price elasticity of supply is 2. What is the quantity supplied before the price change? Calculate
P = Rs 8, P1 = Rs 10 and E2 = 2
Change in quanitity supplied (ΔQ) = 40
ΔP=P1 - P
Price elasticity of supply `(E_s)=(DeltaQ)/(DeltaP)xxP/Q`
2Q = 160
Q = 80 units
Initially, the quanitity supplied was 80 units i.e. before the price change.