Advertisement Remove all ads

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 - Economics

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

Advertisement Remove all ads

Solution

Given that

P = Rs 8, P1 = Rs 10 and E2 = 2

Change in quanitity supplied (ΔQ) = 40

ΔP=P1 - P

=10-8=2

Price elasticity of supply `(E_s)=(DeltaQ)/(DeltaP)xxP/Q`

`2=40/2xx8/Q`

`2=160/Q`

2Q = 160

Q = 80 units

Initially, the quanitity supplied was 80 units i.e. before the price change.

  Is there an error in this question or solution?
Advertisement Remove all ads
Advertisement Remove all ads

Video TutorialsVIEW ALL [2]

Advertisement Remove all ads
Share
Notifications

View all notifications


      Forgot password?
View in app×