Q.The price of a commodity rises from ₹40 to ₹50 per unit, and as a result the quantity supplied rises from 200 units to 250 units per week. Calculate the price elasticity of supply by the percentage method and state its degree.

Price elasticity of supply compares the percentage change in quantity supplied to the percentage change in price.

Step 1 — Percentage change in quantity supplied.

Step 2 — Percentage change in price.

Step 3 — Price elasticity of supply.

Since $E_s = 1$, supply for this commodity is unitary elastic.

Cross-check using the arc (average) method. $\%\Delta Q_s$ on the average base $= \frac{50}{225}\times100 \approx 22.2\%$; $\%\Delta P$ on the average base $= \frac{10}{45}\times100 \approx 22.2\%$. The two percentage changes are equal under either base, so $E_s=1$ either way, confirming the answer.

Assuming supply elasticity, like demand elasticity, is normally negative and needlessly dropping a sign — since price and quantity supplied move in the SAME direction, $E_s$ is normally positive to begin with; also mixing up which value (200 or 250; 40 or 50) is the 'original' base value used in the denominator.