At a price of ₹8 per unit, the quantity supplied of a commodity is 200 units. Its price elasticity of supply is 1.5. If its price rises to ₹10 per unit, calculate the quantity supplied at the new price?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → 275 units
Given:
Old price = ₹8 per unit
New price = ₹10 per unit
Old quantity supplied = 200 units
Price elasticity of supply, eS = 1.5
Price elasticity of supply is the percentage change in quantity supplied divided by the percentage change in price.
Change in price = 10 − 8 = 2
Percentage change in price = (2 / 8) × 100 = 25 per cent
1.5 = Percentage change in quantity / 25
Percentage change in quantity = 1.5 × 25 = 37.5 per cent
Increase in quantity = 37.5 per cent of 200 = 75 units
New quantity supplied = 200 + 75 = 275 units
NCERT (2026-27): Introductory Microeconomics — Chapter 4: The Theory of the Firm under Perfect Competition
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