The coefficient of elasticity of supply of a commodity is 2. A seller supplies 20 units of this commodity at a price ₹10 per units. Calculate the qunatity supplied when price rises by ₹2.

Explanation

Price Elasticity of Supply `(E_(s)) = (DeltaQ)/(DeltaP) xx (P)/(Q)`
`2 = (DeltaQ)/(2) xx (10)/(20) i.e. DeltaQ = 8`
As price increases, the quantity suppplied will also increases. It means,
New Quantilty = Oringinal Quantity (Q) + Change in Quantity
= 20 + 8 = 28 units
New Quantity = 28 units