Identify and define the degree of price elasticity of supply from the

1.	Identify and define the degree of price elasticity of supply from the diagram for the supply curves S1, S2, S3, S4.
Answer» (1) Perfectly Inelastic Supply : When there is no change in quantity supplied in response to any price change, the supply is said to be perfectly or completely inelastic. Here, ∈_s= 0 (ii) Unit Elastic Supply: When proportionate change in supply equals the proportionate change in price, the supply is said to be unit elastic. Here, ∈_s = 1 (iii) Elastic Supply: When change in quantity supplied is more than proportionate change in own price, the supply is said to be elastic. Here, ∈_s > 1 (iv) Inelastic Supply : When the change in quantity supplied is less than proportionate change in own price, supply is said to be inelastic. Here, ∈_s < 1 .

Identify and define the degree of price elasticity of supply from the diagram for the supply curves S1, S2, S3, S4.

Answer»

(1) Perfectly Inelastic Supply : When there is no change in quantity supplied in response to any price change, the supply is said to be perfectly or completely inelastic.

Here, ∈_s= 0

(ii) Unit Elastic Supply: When proportionate change in supply equals the proportionate change in price, the supply is said to be unit elastic.

Here, ∈_s = 1

(iii) Elastic Supply: When change in quantity supplied is more than proportionate change in own price, the supply is said to be elastic.

Here, ∈_s > 1

(iv) Inelastic Supply : When the change in quantity supplied is less than proportionate change in own price, supply is said to be inelastic.

Here, ∈_s < 1 .

Discussion

No Comment Found

Related InterviewSolutions

A plant is kept in a dark cupboard for about 48 hours before conducting any experiment on photosynthesis to :(A) Remove starch from the plant. (B) Ensure that starch is not translocated from the leaves. (C) Remove chlorophyll from the leaf of the plant. (D) Remove starch from the experimental leaf.
The producer of Lime Fresh’ tea introduces ‘Buy one Get one’ scheme on all the products of ‘Lime Fresh’. Identify the promotional strategy’ used by the producer. State any one objective that could be met by this strategy.
A stringed musical instrument, such as the sitar,is provided with a number of wires of different thicknesses. explain the reason for this.
Mention whether the following would result in inflow, outflow or no flow of cash :(i) Issue of fully paid Bonus Shares (ii) Cash withdrawn from Bank
State with reason whether the following would result in inflow, outflow or no flow of cash :(i) Charging depreciation on furniture. (ii) Cash withdrawn for bank for office use.
Give four points of anatomical differences between a monocot stem and a dicot stem.
State the conditions required for total internal reflection of light to take place.
State the conditions required for total internal reflection of light to take place.
(i) When does a ray of light falling on a lens pass through it undeviated ? (ii) Which lens can produce a real and inverted image of an object ?
When acoustic resonance takes place a loud sound is heard. Why does this happen ? Explain.