Question

The price elasticity of supply of a commodity is 2.5 . At a price of Rs. 5 per unit, its quantity supplied is 300 units. Calculate its quantity supplied at a price Of Rs. 4 unit.

Answer 1

`E_(s)=(P)/(Q_(s))xx(DeltaQ_(s))/(DeltaP)`
`2.5=(5)/(300)xx(DeltaQ_(s))/(-1)`
`-750=5DeltaQ_(s)`
`DeltaQ_(s)=-150`
New `Q=Q_(s)+ DeltaQ=300+(-150)=300-150=150` units