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Price elasticity of supply is 2.5. At a ...

Price elasticity of supply is 2.5. At a price of Rs.5/unit its quantity supplied is 300 units. Calculate the quantity supplied at a price of Rs.4/unit.

Text Solution

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`{:(" P 5"),(" P"_(1)" 4,"),(ulbar(Delta"P -1")):}" "{:("Q 300"),("Q"_(1)" "?),(ulbar(DeltaQ" ?")):}`
`P.e_(S)=(P)/(Q)xx(DeltaQ)/(DeltaP)" or "2.5=(5)/(300)xx(DeltaQ)/(-1)`
`DeltaQ=-150`
`DeltaQ=Q_(1)-Q" or "-150=Q_(1)-300`
`Q_(1)=150`
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