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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 300 Kg. elasticity of supply is:
- a)0.75
- b)77
- c)-67
- d)-77
Correct answer is 'B'. Can you explain this answer?
Most Upvoted Answer
If the price of apples rises from Rs 30 per Kg to Rs. 40 per Kg and th...
Calculation of Elasticity of Supply:
Elasticity of Supply = ((% change in quantity supplied)/(% change in price))
% change in quantity supplied = ((300-240)/240)*100 = 25%
% change in price = ((40-30)/30)*100 = 33.33%
Elasticity of Supply = (25/33.33) = 0.75
Therefore, the elasticity of supply is 0.75, which is not the correct option.
Explanation:
To calculate the elasticity of supply, we need to determine the percentage change in the quantity supplied and the percentage change in the price. In this case, the price of apples has increased from Rs. 30 per Kg to Rs. 40 per Kg, which is a 33.33% increase. At the same time, the supply of apples has increased from 240 Kg to 300 Kg, which is a 25% increase.
The elasticity of supply measures the responsiveness of the quantity supplied to a change in price. If the elasticity of supply is greater than 1, it implies that the supply is highly responsive to changes in price. If it is less than 1, it implies that the supply is not very responsive to changes in price.
According to the options given, option B is -77, which is incorrect. There seems to be an error in the options provided. The correct answer should be somewhere between 0.75 and 1, as the percentage change in supply is less than the percentage change in price.
In conclusion, the correct elasticity of supply cannot be determined from the given options.
Elasticity of Supply = ((% change in quantity supplied)/(% change in price))
% change in quantity supplied = ((300-240)/240)*100 = 25%
% change in price = ((40-30)/30)*100 = 33.33%
Elasticity of Supply = (25/33.33) = 0.75
Therefore, the elasticity of supply is 0.75, which is not the correct option.
Explanation:
To calculate the elasticity of supply, we need to determine the percentage change in the quantity supplied and the percentage change in the price. In this case, the price of apples has increased from Rs. 30 per Kg to Rs. 40 per Kg, which is a 33.33% increase. At the same time, the supply of apples has increased from 240 Kg to 300 Kg, which is a 25% increase.
The elasticity of supply measures the responsiveness of the quantity supplied to a change in price. If the elasticity of supply is greater than 1, it implies that the supply is highly responsive to changes in price. If it is less than 1, it implies that the supply is not very responsive to changes in price.
According to the options given, option B is -77, which is incorrect. There seems to be an error in the options provided. The correct answer should be somewhere between 0.75 and 1, as the percentage change in supply is less than the percentage change in price.
In conclusion, the correct elasticity of supply cannot be determined from the given options.
Community Answer
If the price of apples rises from Rs 30 per Kg to Rs. 40 per Kg and th...
Original price=30 New price=40 Original qty =240 New qty=300 Change in price=10 Change in qty =60 Es=change in qty/change in price *original price /original qty =60/10*30/240 =0.75
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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 300 Kg. elasticity of supply is:a)0.75b)77c)-67d)-77Correct answer is 'B'. Can you explain this 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 300 Kg. elasticity of supply is:a)0.75b)77c)-67d)-77Correct answer is '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 If the price of apples rises from Rs 30 per Kg to Rs. 40 per Kg and the supply increases from 240 Kg to 300 Kg. elasticity of supply is:a)0.75b)77c)-67d)-77Correct answer is '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 If the price of apples rises from Rs 30 per Kg to Rs. 40 per Kg and the supply increases from 240 Kg to 300 Kg. elasticity of supply is:a)0.75b)77c)-67d)-77Correct answer is 'B'. Can you explain this answer?.
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