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If the price of apples rises from Rs. 30 per kg to Rs. 40 per kg and the supply increases from 240 kg to Rs. 300 kg. Elasticity of supply is

  • a)
    0.75

  • b)
    0.77

  • c)
    -0.67

  • d)
    -0.77

Correct answer is option 'B'. Can you explain this answer?

Answers

Arc Ed = [(Qd2 – Qd1) / midpoint Qd] ÷ [(P2 – P1) / midpoint P]


= [(300 – 240) / 270] ÷ [(40 – 30) / 35]


= 0.222/0.285


= 0.77

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If the price of apples rises from Rs. 30 per kg to Rs. 40 per kg and the supply increases from 240 kg to Rs. 300 kg. Elasticity of supply isa)0.75b)0.77c)-0.67d)-0.77Correct answer is option 'B'. Can you explain this answer?

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When question asks to find out elasticity of supply on given point ,then

we'll use general formula

as here the question wants us to find elasticity of supply between two prices


so using arc method formula is correct


B is the correct answer

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If the price of apples rises from Rs. 30 per kg to Rs. 40 per kg and the supply increases from 240 kg to Rs. 300 kg. Elasticity of supply isa)0.75b)0.77c)-0.67d)-0.77Correct answer is option 'B'. Can you explain this answer? for CA Foundation 2023 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about If the price of apples rises from Rs. 30 per kg to Rs. 40 per kg and the supply increases from 240 kg to Rs. 300 kg. Elasticity of supply isa)0.75b)0.77c)-0.67d)-0.77Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2023 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If the price of apples rises from Rs. 30 per kg to Rs. 40 per kg and the supply increases from 240 kg to Rs. 300 kg. Elasticity of supply isa)0.75b)0.77c)-0.67d)-0.77Correct answer is option 'B'. Can you explain this answer?.
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Arc Ed= [(Qd2– Qd1) / midpoint Qd] ÷ [(P2– P1) / midpoint P]=[(300– 240) / 270] ÷ [(40– 30) / 35]= 0.222/0.285= 0.77