When the price of a good rises from Rs 20 per unit to Rs 130 per unit, the revenue of the firm producing tnis good rises from Rs 100 to Rs300. Calculate Price Elasticity of Supply.
Quantity Supplied (Q) =TR / P
Q1 = 300/30 = 10
P = 20
Q= 5 P, =30 Qi =10
∆P = Py -P = 30-20 =10 ∆Q = Q1 - Q= 10-5 = 5
Price Elasticity of Supply (E,) =∆Q / ∆P x P / Q = 5 / 10 x 20 /5 = 2 (More than unit elastic)