Answer to Question #180080 in Economics for Akshay

Question #180080

Calculate the elasticity of supply if a 15% increase in the price of soya bean oil increases its supply from 300 to 345 units

Expert's answer

e_s = % change in supply / % change in price

change in supply = (100 x (Q1-Q)) / Q = (100 x (345-300)) / 300 = 15%

e_s = 15 / 15 = 1

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