Answer to Question #197953 in Economics for Vaishali

Question

Define elasticity of supply and find the price from the given statement:

If Es of a good is 2 and a firm supplies 200 units at price of Rs 8 per unit, then at what price will the firm supply 250 units.

Answer 1

$$E=\frac {Q_2-Q_1}{p_2-p_1}\times \frac {p_1}{Q_1}$$

$$2=\frac{250-200}{p_2-8}\times \frac{8}{200}$$

$$p_2=9$$