Question

If market price of a commodity is Rs.5/unit, a seller is willing to sell 600 units of the commodity. When the price rises to Rs.6/unit he is willing to sell 800 units of the commodity. Calculate price elasticity of supply.

Answer 1

`{:("P 5"),(P_(1)" 6,"),(ulbar(DeltaP" 1")):}" "{:("Q 600"),(Q_(1)" 800"),(ulbar(DeltaQ" 200")):}" "P.e_(S)=(P)/(Q)xx(DeltaQ)/(DeltaP)=(5)/(600)xx(200)/(1)=1.67`
Ans. `P.e_(S)=1.67`