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    I need some help with this question on PES. I know the answer is B after looking at the mark scheme but I don't get it. All help appreciated.

    A good has a price elasticity of supply of +0.8. At present, the quantity supplied of the good is 200 units per week at a market price of £800 per unit. If the price rises to £1000 per unit then the quantity supplied per week would...

    A increase to 250 units.
    B increase to 240 units.
    C increase to 360 units.
    D decrease to 160 units
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    Any help?
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    Not in economics, but shouldn’t it be C, as 200 x 1.8 = 360
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    (Original post by Davedude)
    Not in economics, but shouldn’t it be C, as 200 x 1.8 = 360
    I thought the same thing! According to the mark shceme, it says the answer is B 240?
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    Elasticities are concerned with proportional change.

    PES= % change Qs / % change P

    Therefore % change Qs = PES x % change P

    Price increased from 800 to 1000 which is a percentage increase of 25% or 0.25.

    0.8 x 0.25 = 0.2

    Therefore proportional change in Q is 0.2.

    200 x 0.2 = 40

    200+40=240
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    (Original post by BasicMistake)
    Elasticities are concerned with proportional change.

    PES= % change Qs / % change P

    Therefore % change Qs = PES x % change P

    Price increased from 800 to 1000 which is a percentage increase of 25% or 0.25.

    0.8 x 0.25 = 0.2

    Therefore proportional change in Q is 0.2.

    200 x 0.2 = 40

    200+40=240
    Thanks that really helped!
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    PES = %change in supply / %change in price

    0.8 = %change in supply / (1000-800 x 100)

    0.8 = %change in supply / 25

    0.8 x 25 = % change in supply = 20

    200 units = 100%

    X units = 100% + 20% (increase by 20%)

    X units = 200 / 100 x 120

    X units = 240
 
 
 
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