The ratio of elasticity of supply of commodities A and B is `1:1.5.` 20 per cent fall in price of A results in a 40 per cent fall in its supply. Calculate the percentage increase in supply of B if its price rises from Rs.10 per unit of Rs.11 per unit.

Explanation

(i) `P.e_(S)" of good A"=(%DeltaQ_(A))/(%DeltaP_(A))=(-40%)/(-20%)=2`
(ii) `P.e_(S)` of B is `1.5` times of `P.e_(s)` of 'A'.
Hence `P.e_(S)" of B"=1.5xx2=3`
`P.e_(S)" of good B"=(%DeltaQ_(B))/(%DeltaP_(B))`
`3=(%DeltaQ_(B))/(10%^(**))`
`%DeltaQ_(B)=30%`
`{:(" P 10"),(" P"_(1)" 11"),(ulbar(DeltaP=1)):}`
`%DeltaP=(1)/(10)xx100`
`=10%`
Percentage increase in supply of B = `30%`.