A firm earns a revenue of Rs 50 when the market price of a good is Rs

1.	A firm earns a revenue of Rs 50 when the market price of a good is Rs 10. The market price increase to Rs 15 and the firm now earns a revenue of Rs 150. What is the price elasticity of the firm's supply curve?
Answer» At Price, P₁ = Rs 10 Total Revenue, TR₁ = P₁ x Q₁ = 50 = TR₁/P₁ = Q₁ = 50/10 = Q₁ = Q₁ = 5units At Price, = Rs 15 Total Revenue, TR₂ = P₂ x Q₂ =150 = Q₂ = TR₂/P₂ = Q₂= 150/15 = Q₂ = 10 units Elasticity of supply,e_s = ΔQ/ΔP x P/Q ΔQ = Q₂ - Q₁ = 10 - 5 = 5 P = P₁ - P₂ = 15 - 10 = 5 e_s = 5/5 x 10/5 e_s = 2.

A firm earns a revenue of Rs 50 when the market price of a good is Rs 10. The market price increase to Rs 15 and the firm now earns a revenue of Rs 150. What is the price elasticity of the firm's supply curve?

Answer»

At Price, P₁ = Rs 10
Total Revenue, TR₁ = P₁ x Q₁ = 50

= TR₁/P₁ = Q₁

= 50/10 = Q₁

= Q₁ = 5units

At Price, = Rs 15
Total Revenue, TR₂ = P₂ x Q₂ =150

= Q₂ = TR₂/P₂

= Q₂= 150/15

= Q₂ = 10 units

Elasticity of supply,e_s = ΔQ/ΔP x P/Q

ΔQ = Q₂ - Q₁ = 10 - 5 = 5

P = P₁ - P₂ = 15 - 10 = 5

e_s = 5/5 x 10/5

e_s = 2.

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A firm earns a revenue of Rs 50 when the market price of a good is Rs 10. The market price increase to Rs 15 and the firm now earns a revenue of Rs 150. What is the price elasticity of the firm's supply curve?

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