The ratio of elasticity of supply of commodities A and B is 1:1.5. 20 per cent fall in price of the A result in a 40 per cent fall in its supply. Calculate the precetage increase in supply of B if its prics rises form ₹10 per unit to ₹11 per units.

Explanation

`E_(s) = ("Percentage Change in Supply")/("Percentage change in Price") =(40%)/(20%) = 2`
Now, Price Elasticity of Good B = 3 ,,,,(as`E_(s)` of B is 1.5 times of `E_(s)` of A)
Let us now Calculate percenge increases in supply of B

Percentage change in Price `= (Delta P)/(P) xx 100 =(1)/(10) xx 100 = 10% `
`3= ("Percentage Change in Supply")/(10)`
Percentage change (increases) in supply = 30%
Perecentage increases in supply of B = 30%