CA Foundation Exam > CA Foundation Questions > The supply function is given as Q=-100 10P.Fi...
Start Learning for Free
The supply function is given as Q=-100 10P.Find the elasticity using point method when price is 15?
Most Upvoted Answer
The supply function is given as Q=-100 10P.Find the elasticity using p...
Elasticity Calculation using Point Method
Given Information:
- Supply Function: Q = -100 + 10P
- Price: P = 15
Calculating Elasticity:
The formula for price elasticity of supply using point method is:
Elasticity = (Percentage change in quantity supplied / Percentage change in price)
Step 1: Calculate Initial Quantity Supplied
Using the supply function, we can calculate the initial quantity supplied at price P=15:
Q = -100 + 10P
Q = -100 + 10(15)
Q = -100 + 150
Q = 50
Step 2: Calculate New Quantity Supplied
To calculate the new quantity supplied, we need to change the price by a small amount. Let's assume the new price is P=16:
Q = -100 + 10P
Q = -100 + 10(16)
Q = -100 + 160
Q = 60
Step 3: Calculate Percentage Change in Quantity Supplied
The percentage change in quantity supplied is:
Percentage change in quantity supplied = ((New Quantity Supplied - Initial Quantity Supplied) / Initial Quantity Supplied) x 100
Percentage change in quantity supplied = ((60 - 50) / 50) x 100
Percentage change in quantity supplied = 20%
Step 4: Calculate Percentage Change in Price
The percentage change in price is:
Percentage change in price = ((New Price - Initial Price) / Initial Price) x 100
Percentage change in price = ((16 - 15) / 15) x 100
Percentage change in price = 6.67%
Step 5: Calculate Elasticity
Using the formula for price elasticity of supply using point method:
Elasticity = (Percentage change in quantity supplied / Percentage change in price)
Elasticity = (20% / 6.67%)
Elasticity = 3
Interpretation of Results:
The elasticity of supply at price P=15 is 3. This means that a 1% increase in price will result in a 3% increase in quantity supplied.
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Similar CA Foundation Doubts
Top Courses for CA FoundationView all
The supply function is given as Q=-100 10P.Find the elasticity using point method when price is 15?
Question Description
The supply function is given as Q=-100 10P.Find the elasticity using point method when price is 15? 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 The supply function is given as Q=-100 10P.Find the elasticity using point method when price is 15? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The supply function is given as Q=-100 10P.Find the elasticity using point method when price is 15?.
The supply function is given as Q=-100 10P.Find the elasticity using point method when price is 15? 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 The supply function is given as Q=-100 10P.Find the elasticity using point method when price is 15? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The supply function is given as Q=-100 10P.Find the elasticity using point method when price is 15?.
Solutions for The supply function is given as Q=-100 10P.Find the elasticity using point method when price is 15? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of The supply function is given as Q=-100 10P.Find the elasticity using point method when price is 15? defined & explained in the simplest way possible. Besides giving the explanation of
The supply function is given as Q=-100 10P.Find the elasticity using point method when price is 15?, a detailed solution for The supply function is given as Q=-100 10P.Find the elasticity using point method when price is 15? has been provided alongside types of The supply function is given as Q=-100 10P.Find the elasticity using point method when price is 15? theory, EduRev gives you an
ample number of questions to practice The supply function is given as Q=-100 10P.Find the elasticity using point method when price is 15? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup