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When price of a commodity falls from Rs....

When price of a commodity falls from Rs. 12 per unit to Rs. 9 per unit, the producer supplies `75%` less output. Calculate price elasticity of supply.

Text Solution

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`P.e_(S)=(%DeltaQ_(x))/(%DeltaP_(x))`
`{:(" P 12"),(" P"_(1)" 9"),(ulbar(DeltaP-3)):}" "%DeltaP=(DeltaP)/(P)xx100=(-3)/(12)xx100=(-)25%`
`P.e_(s)=((-)75%)/((-)25%)=3" Ans."P.e_(S)=3`
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