Question 25.
If price elasticity of supply is 2, it means that 10% fall in price leads to …………….. fall in supply. [1]
(A) 10%
(B) 20%
(C) 5%
(D) None of the these
Answer:
Option (B) is correct.
Explanation: If price elasticity of supply is 2, it means 20% change in quantity supply take place after the change of 10% in price of the commodity.