Please solve number 3 part 2.

So, you've been given the initial price = 5, the total revenue at that price = 400. 
When price rises by 20%, the new price will be (5+ 20% of 5) = 5+1=6.
Similarly, as given, total revenue too increased by 400. So the new TR = 800+400 =1200
Now the Price elasticity of Supply is (% change in quantity supplied/% change in the price)
So, % change in quantity supplied = ( X/100 of 800 = 400) that gives you X= 50 
And the % change in the price is already given in the question, i.e 20%.
So the Price Elasticity will be ( % change in quantity supplied / % change in the price.) = 50/20 = 2.5 

Hope it helps.

 

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