Question

When the price of a product rises from RS 100 to RS 200, quantity supplied increases from 50 units to 80 units. What is the value of price elasticity of supply?

Answer 1

The value of price elasticity of supply is:

$Es = \frac{80 - 50} {200 - 100} × \frac {200 + 100} {80 + 50} = 900/1300 = 0.69.$

So, the supply is inelastic.