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The price elasticity of supply of commod...

The price elasticity of supply of commodities X and Y is equal. The price of X falls from Rs.10 to Rs.8 per unit and supply falls by 16 percent. The price of Y rises by `10%`. Calculate the percentage increase in the supply.

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Let us calculate `P.e_(S)` for commodity X ltbr. `P=10," "P_(1)=8," "DeltaP=-2`
`%DeltaP=(-2)/(10)xx100=-20%`
`%DeltaS=-16%` given
`"Hence "P.e_(S)=(%"Change in Quantity supplied"_(X))/(%"Change in price"_(X))=((-)16%)/((-)20%)=0.8`
`P.e_(S)" of X"=P.e_(S)" of Y (given)"`
Hence `P.e_(S)` of Y = 0.8
`P.e_(S)(Y)=(%"Change in Quantity supplied"_(Y))/(%"Change in price"_(Y))`
`0.8=(%"change in Quantity supplied"_(Y))/(10%)`
`%"change in QS"_(Y)=(8)/(10)xx10=8%.`
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