CBSE Class 12-commerce Answered
When the market price of a good changes from Rs. 10 to
Rs.20. As a result, the quantity supplied by a firm increases by 20 units.
The price elasticity of a firm’s supply curve is 0.4. Find the initial and
final output levels of the firm.
Asked by Topperlearning User | 25 Apr, 2016, 02:40: PM
Expert Answer
Price elasticity of supply = Price/ quantity * Change in Quantity/ Change in price
0.4 = 10/? * 20/20
0.4 = 10
Initial output = 10/0.4 = 25 units
Final output = 25 units + 20 units= 45 units
Answered by | 25 Apr, 2016, 04:40: PM
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