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Question

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

Solution
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Percentage change in price =20%
Percentage change in quantity supplied =QQ×100
=250100100×100=150100×100=150%
Elasticity of supply (ES)=Percentage change in quantity suppliedPercentage change in price
=150%20%=7.5(elastic)
Elasticity of supply =7.5.

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