CA Foundation Exam > CA Foundation Questions > At a price of Rs.25 per kg., the supply of a ...
Start Learning for Free
At a price of Rs.25 per kg., the supply of a commodity is 10,000 kgs. per week. An increase in its price to Rs.30 per kg. increases the supply of the commodity to 12,000 kgs. per week. The elasticity of supply will be:?
Most Upvoted Answer
At a price of Rs.25 per kg., the supply of a commodity is 10,000 kgs. ...
Calculation of Elasticity of Supply
Elasticity of supply can be calculated using the following formula:
Elasticity of Supply = % change in quantity supplied / % change in price
To calculate the % change in quantity supplied, we use the following formula:
% change in quantity supplied = (New quantity supplied - Old quantity supplied) / Old quantity supplied x 100
Using the given data, we can calculate the % change in quantity supplied as follows:
% change in quantity supplied = (12,000 - 10,000) / 10,000 x 100 = 20%
To calculate the % change in price, we use the following formula:
% change in price = (New price - Old price) / Old price x 100
Using the given data, we can calculate the % change in price as follows:
% change in price = (30 - 25) / 25 x 100 = 20%
Substituting the values in the elasticity of supply formula, we get:
Elasticity of Supply = 20% / 20% = 1
Therefore, the elasticity of supply is 1.
Explanation of Elasticity of Supply
The elasticity of supply measures the responsiveness of the quantity supplied of a commodity to a change in its price. If the elasticity of supply is greater than 1, it means that the quantity supplied is highly responsive to changes in price, and the supply of the commodity is said to be elastic. On the other hand, if the elasticity of supply is less than 1, it means that the quantity supplied is not very responsive to changes in price, and the supply of the commodity is said to be inelastic.
In this case, the elasticity of supply is 1, which means that the quantity supplied is equally responsive to changes in price. This indicates that the supply of the commodity is neither highly elastic nor highly inelastic, but somewhere in between. Therefore, a change in price will result in a proportional change in the quantity supplied.
Elasticity of supply can be calculated using the following formula:
Elasticity of Supply = % change in quantity supplied / % change in price
To calculate the % change in quantity supplied, we use the following formula:
% change in quantity supplied = (New quantity supplied - Old quantity supplied) / Old quantity supplied x 100
Using the given data, we can calculate the % change in quantity supplied as follows:
% change in quantity supplied = (12,000 - 10,000) / 10,000 x 100 = 20%
To calculate the % change in price, we use the following formula:
% change in price = (New price - Old price) / Old price x 100
Using the given data, we can calculate the % change in price as follows:
% change in price = (30 - 25) / 25 x 100 = 20%
Substituting the values in the elasticity of supply formula, we get:
Elasticity of Supply = 20% / 20% = 1
Therefore, the elasticity of supply is 1.
Explanation of Elasticity of Supply
The elasticity of supply measures the responsiveness of the quantity supplied of a commodity to a change in its price. If the elasticity of supply is greater than 1, it means that the quantity supplied is highly responsive to changes in price, and the supply of the commodity is said to be elastic. On the other hand, if the elasticity of supply is less than 1, it means that the quantity supplied is not very responsive to changes in price, and the supply of the commodity is said to be inelastic.
In this case, the elasticity of supply is 1, which means that the quantity supplied is equally responsive to changes in price. This indicates that the supply of the commodity is neither highly elastic nor highly inelastic, but somewhere in between. Therefore, a change in price will result in a proportional change in the 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
At a price of Rs.25 per kg., the supply of a commodity is 10,000 kgs. per week. An increase in its price to Rs.30 per kg. increases the supply of the commodity to 12,000 kgs. per week. The elasticity of supply will be:?
Question Description
At a price of Rs.25 per kg., the supply of a commodity is 10,000 kgs. per week. An increase in its price to Rs.30 per kg. increases the supply of the commodity to 12,000 kgs. per week. The elasticity of supply will be:? 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 kgs. per week. An increase in its price to Rs.30 per kg. increases the supply of the commodity to 12,000 kgs. per week. The elasticity of supply will be:? 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 kgs. per week. An increase in its price to Rs.30 per kg. increases the supply of the commodity to 12,000 kgs. per week. The elasticity of supply will be:?.
At a price of Rs.25 per kg., the supply of a commodity is 10,000 kgs. per week. An increase in its price to Rs.30 per kg. increases the supply of the commodity to 12,000 kgs. per week. The elasticity of supply will be:? 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 kgs. per week. An increase in its price to Rs.30 per kg. increases the supply of the commodity to 12,000 kgs. per week. The elasticity of supply will be:? 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 kgs. per week. An increase in its price to Rs.30 per kg. increases the supply of the commodity to 12,000 kgs. per week. The elasticity of supply will be:?.
Solutions for At a price of Rs.25 per kg., the supply of a commodity is 10,000 kgs. per week. An increase in its price to Rs.30 per kg. increases the supply of the commodity to 12,000 kgs. per week. The elasticity of supply will be:? 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 At a price of Rs.25 per kg., the supply of a commodity is 10,000 kgs. per week. An increase in its price to Rs.30 per kg. increases the supply of the commodity to 12,000 kgs. per week. The elasticity of supply will be:? defined & explained in the simplest way possible. Besides giving the explanation of
At a price of Rs.25 per kg., the supply of a commodity is 10,000 kgs. per week. An increase in its price to Rs.30 per kg. increases the supply of the commodity to 12,000 kgs. per week. The elasticity of supply will be:?, a detailed solution for At a price of Rs.25 per kg., the supply of a commodity is 10,000 kgs. per week. An increase in its price to Rs.30 per kg. increases the supply of the commodity to 12,000 kgs. per week. The elasticity of supply will be:? has been provided alongside types of At a price of Rs.25 per kg., the supply of a commodity is 10,000 kgs. per week. An increase in its price to Rs.30 per kg. increases the supply of the commodity to 12,000 kgs. per week. The elasticity of supply will be:? theory, EduRev gives you an
ample number of questions to practice At a price of Rs.25 per kg., the supply of a commodity is 10,000 kgs. per week. An increase in its price to Rs.30 per kg. increases the supply of the commodity to 12,000 kgs. per week. The elasticity of supply will be:? 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
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup