a 10+ rise in the price of good Y results in a rise in its supply from 400 units to - Economics - Open Economy Macroeconomics

Question

a 10+ rise in the price of good Y results in a rise in its supply
from 400 units to 520 units calculate + change in quantity supplied
o good X when its pice fall from rs 10 to rs 8 per unit

Sraya Das · Accepted Answer

Dear Student

First let us calculate the price elasticity of supply
% change in supply =520-400400×100=120400×100=30%E(elaticity)=%change in supply÷%change of price=30/10=3Now,%change in price=10-810×100=20%E=3So , % change in quantity supplied=E×%change in price=60%60%=400-x/400or,60100×400=400-xor,x=400-240=160units
Therefore when price falls from 10 to 8 supply falls from 400 to
160 units

Regards

a 10+ rise in the price of good Y results in a rise in its supply from 400 units to 520 units. calculate + change in quantity supplied o good X when its pice fall from rs. 10 to rs. 8 per unit.