The ratio of elasticity of supply of commodities A and B is 1:1 5 20% fall in price of - Economics - Production and Costs

Question

The ratio of elasticity of supply of commodities A and B is 1:1
5 20% fall in price of A results in a 40% fall in its supply
Calculate the % increase in supply of B if its price riss from Rs
10 per unit to Rs 11 per unit

Shvetika Sharma · Accepted Answer

Given:Ratio of elasticity = eAeB = 11
5Percentage chnage in price of A = 20%Percentage change in Quantity of A = 40%Percentage change in price of B =11 -1010 = 10% To find: Percentage change in supply of BNow, eAeB = Percentage change in Quantity of APercentage change in price of APercentage change in Quantity of BPercentage change in price of BSubstituiing the values11
5 = 4020Percentage change in Quantity of B10On solving we get, Percentage change in Quantity of B = 30%

The ratio of elasticity of supply of commodities A and B is 1:1.5. 20% fall in price of A results in a 40% fall in its supply. Calculate the % increase in supply of B if its price riss from Rs 10 per unit to Rs 11 per unit.