ECONOMICS MCQ- JUNE 2005 P1 Q 9

[dasani0708]

7 The market for tractors is supplied by two firms, X and Y, each initially having 50 % of the market.
A 10 % increase in the price of tractors leads to an increase in output from firm X of 10 % and
from firm Y of 20 %.
What is the price elasticity of supply of tractors in this market?
A 1 B 1.5 C 2 D 3

how to get the answer.

 

[princesszahra]

7 The market for tractors is supplied by two firms, X and Y, each initially having 50 % of the market.
A 10 % increase in the price of tractors leads to an increase in output from firm X of 10 % and
from firm Y of 20 %.
What is the price elasticity of supply of tractors in this market?
A 1 B 1.5 C 2 D 3

how to get the answer.

i wish i could help U!!!!!!!!!!!

 

[Moiz]

PES= % change in Qs/ % change in price

PES of market will be= ((20%+10%)/2)/10%
=1.5