Answer to Question #135173 in Macroeconomics for Priya

Question

If the price of a commodity increases from $.40 and $. 60 and its supply increases from 6 kg and 9 kg . Calculate its elasticity of supply.

Answer 1

Elasticity of Supply =$\frac{\% Change in Quantity} {\% Change in price}$

Percentage change in Price =40$-$ 60=20

=$\frac{20}{60}×100 =33.33\%$

Percentage change in Quantity =6$-$ 9=3

=$\frac{3}{6} ×100 =50\%$

Thus ;Elasticity of Supply =$\frac{50\%}{33.33\%} =1.5$

Elasticity of Supply =1.5