Find elasticity of supply when price increases by 20 per cent and… - Vidyadip

Question

Find elasticity of supply when price increases by $20$ per cent and quantity increases from $100$ to $250$ units of the commodity.

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Answer

Percentage change in price $=20 \%$
Percentage change in quantity supplied $=\frac{\Delta Q}{Q} \times 100$
$=\frac{250-100}{100} \times 100$
$=\frac{150}{100} \times 100$
$=150 \%$
Elasticity of supply $\left( E _S\right)=\frac{\text { Percentage change in quantity sup plied }}{\text { Percentage change in price }}$
$=\frac{150 \%}{20 \%}$
$=7.5 ($elastic$)$
Elasticity of supply $=7.5$.

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