Answer:
Elasticity of supply \[(Es)=2\] Quantity supplied (Q) = 100 units Price (P) = Rs. 20/unit New quantity \[({{Q}_{1}})\] = 80 units New price (\[{{P}_{ & 1}}\]) =? Change in quantity supplied \[(\Delta Q)={{Q}_{1}}-Q\] \[=80100\] \[=20\text{ }units\] \[{{E}_{s}}=(\Delta Q\div \Delta P)\,\times \,(P-Q)\] \[2=(-\,20\div \Delta P)\times \,(20\div 100)\] \[2=(-20/(-\Delta P)\,\times \,(1/5)\] (\[-\Delta P\]is taken because prices are fallen splly is falling \[2=(-\,4/(-\Delta P))\] \[2\,\Delta P=\,-\,4\] \[-\,\Delta P=-4/2\] \[-\,\Delta P=-\,2\] \[\Delta P=(P-P1)\] \[2=(20-P1)\] \[P1=20-2\] = Rs. units. Hence, the seller will supply 80 units at Rs. 18 per units.
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