Question

he coefficient of elasticity of supply of a commodity is 4. A seller supplies 40 units of this commodity at a price of birr 20 per unit. What quantity of this commodity will the seller supply when price rises by birr 24 per unit

Answer 1

$E=4$ $Q1=40$ $p=20$ $Q2=?$

$E=\frac{\delta Q}{\delta p}*\frac{p}{Q1}$

$4=\frac{\delta Q}{4}*\frac{20}{40}$

$\delta Q=32$

$32+40=72$ quantity of this commodity will the seller supply