If price of a commodity rises from Rs. 10 to Rs. 15, its supply increases by 20%. Calculate the price elasticity of supply for this commodity.

0.4

The correct answer is Option (1) → 0.4

Es​=Percentage change in quantity supplied/ Percentage change in price

Percentage change in quantity supplied = 20%

Percentage change in price =[ Change in Price / Initial Price] *100

                                               = [(15 - 10 ) /10] * 100

                                               = 50 %

Es​= 20% / 50% =0.4