Question

    A firm sells 40 units of commodity X when its price is

    10. At what price it will sell 60 units of the commodity if its price elasticity of supply is 0.8. 
    A 14.85 Correct Answer Incorrect Answer
    B 19.1 Correct Answer Incorrect Answer
    C 13.2 Correct Answer Incorrect Answer
    D 17.3 Correct Answer Incorrect Answer
    E 16.25 Correct Answer Incorrect Answer

    Solution

    es = (delta Q* P)/ (delta P*Q) 0.8 = 20*10/(P2-20) *40 P2 = 16.25

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