Question

If price of a commodity falls from Rs.60/unit to Rs.58/unit, its supply falls from 400 units to 300 units. Find out elasticity of supply.

Answer 1

`{:(" P 60"),(" P"_(1)" 58"),(ulbar(DeltaP" -2")):}" "{:("Q 400"),("Q"_(1)" 300"),(ulbar(Delta-100)):}" "P.e_(S)=(P)/(Q)xx(DeltaQ)/(DeltaP)=(60)/(400)xx(-100)/(-2)=7.5`
`P.e_(S)=7.5` (Greater than unitary elastic.)