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 At a price of Rs. 25 per kg, the supply of a commodity is 10,000 kg per week. An increase in its price to Rs. 30 per kg, increases the supply of the commodity to 12,000 kg per week. The elasticity of supply will be:-
  • a)
    0.75
  • b)
    1.00
  • c)
    1.50
  • d)
    1.75
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
At a price of Rs. 25 per kg, the supply of a commodity is 10,000 kg pe...
Given information:
Price of commodity (P1) = Rs. 25 per kg
Supply of commodity (Q1) = 10,000 kg per week
New price of commodity (P2) = Rs. 30 per kg
New supply of commodity (Q2) = 12,000 kg per week

Formula for calculating elasticity of supply:
Elasticity of supply = % change in quantity supplied / % change in price

Calculation:
% change in quantity supplied = (Q2 - Q1) / Q1 x 100
= (12,000 - 10,000) / 10,000 x 100
= 20%

% change in price = (P2 - P1) / P1 x 100
= (30 - 25) / 25 x 100
= 20%

Elasticity of supply = % change in quantity supplied / % change in price
= 20% / 20%
= 1.00

Therefore, the elasticity of supply is 1.00, which means that the supply of the commodity is perfectly elastic.
Free Test
Community Answer
At a price of Rs. 25 per kg, the supply of a commodity is 10,000 kg pe...
Elasticity=∆DQ/∆DP

∆DQ= D2-D1/D1 × 100

∆DP=P2-P1/P1×100 SO,

∆DQ = 12000-10000/10000×100 = 20

∆DP= 30-25/25×100 =20


elasticity= 20/20= 1.
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At a price of Rs. 25 per kg, the supply of a commodity is 10,000 kg per week. An increase in its price to Rs. 30 per kg, increases the supply of the commodity to 12,000 kg per week. The elasticity of supply will be:-a)0.75b)1.00c)1.50d)1.75Correct answer is option 'B'. Can you explain this answer?
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At a price of Rs. 25 per kg, the supply of a commodity is 10,000 kg per week. An increase in its price to Rs. 30 per kg, increases the supply of the commodity to 12,000 kg per week. The elasticity of supply will be:-a)0.75b)1.00c)1.50d)1.75Correct answer is option 'B'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about At a price of Rs. 25 per kg, the supply of a commodity is 10,000 kg per week. An increase in its price to Rs. 30 per kg, increases the supply of the commodity to 12,000 kg per week. The elasticity of supply will be:-a)0.75b)1.00c)1.50d)1.75Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for At a price of Rs. 25 per kg, the supply of a commodity is 10,000 kg per week. An increase in its price to Rs. 30 per kg, increases the supply of the commodity to 12,000 kg per week. The elasticity of supply will be:-a)0.75b)1.00c)1.50d)1.75Correct answer is option 'B'. Can you explain this answer?.
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