The price of a commodity rises by 20% which leads to increase in supply by 20 units.if price elasticity is 2 calculate initial and final supply.

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answer of question asked by Rajappa on 13-11-2018 is

first we will apply formula of TR i.e TR=PxQ

in case 1

TR is given 1000 & P is 8 therefore 1000=8xQ, Q=1000/8 , Q=125

in case 2

TR is given 1500 & P is 10 therefore 1500=10xQ . Q=1500/10 .Q= 150

apply the formula

E.Sp=P/Q X ▲Q/▲P

E.Sp=8/125 X 25/2

= 4/5

= 0.8 hence solved

first we will apply formula of TR i.e TR=PxQ

in case 1

TR is given 1000 & P is 8 therefore 1000=8xQ, Q=1000/8 , Q=125

in case 2

TR is given 1500 & P is 10 therefore 1500=10xQ . Q=1500/10 .Q= 150

apply the formula

E.Sp=P/Q X ▲Q/▲P

E.Sp=8/125 X 25/2

= 4/5

= 0.8 hence solved

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Biswajeet GVAmp is also called GDPmp

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