Qunatity supplied of a commodity increases by by 20% when its price rises from ₹4per unit to ₹ per unit. Caculate elastic of supply.

Explanation

Percentage change in Price `= (DeltaP)/(P) xx 100 = (1)/(4) xx 100 = 25%`
`E_(s) = ("Percentage Change in Supply")/("Percentage change in Price") = (25%)/(25%) = 1`
`E_(s) = 1` (Supply is unitary elastic as `E_(s) =1`)
`E_(s) ` is always positive due to direct relationship between price and quantity supplied