The price elasticity of supply of good X is half the price elasticity of supply of good Y. A 10% rise in the price of good Y results in a rise in its supply from 400 units to 520 units. calculate the %age change in quantity supplied of good X when its price falls from Rs 10 to Rs 8 per unit.
Let initial quantity supplied (Q1) be 400 units
Final quantity supplied (Q2) be 520 units
Change in quantity supplied =
According to the question,
Price elasticity of supply of good X = ​Price elasticity of supply of good Y
The negative sign denotes the percentage fall in the supply of good X.
Final quantity supplied (Q2) be 520 units
Change in quantity supplied =
According to the question,
Price elasticity of supply of good X = ​Price elasticity of supply of good Y
The negative sign denotes the percentage fall in the supply of good X.