The price elasticity of supply of a commodity is 2. When its price falls from Rs. 10 to Rs. 8 per unit, its quantity supplied falls by 500 units . Cal
The price elasticity of supply of a commodity is 2. When its price falls from Rs. 10 to Rs. 8 per unit, its quantity supplied falls by 500 units . Calculate the quantity supplied at the reduced price.
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`E_(s)=(P)/(Q)xx(DeltaQ)/(DeltaP),2=(10)/(Q)xx(-500)/(-2),4Q=5000,Q=1250`
Supply at `Rs 8=Q+ DeltaQ=1250 +(-500)=750` units.
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