Micro

Market Equilibrium

Medium

When the price of a good falls from Rs. 40 to Rs 30, the total revenue earned by the firm falls from Rs. 4000 to Rs. 2700, find price elasticity of supply for the good.

1.3

0.5

✅ Drop

Price $(P_1 = 40,; P_2 = 30)$

Total Revenue $(TR = P \times Q)$

$Q_1 = \frac{4000}{40} = 100$

$Q_2 = \frac{2700}{30} = 90$

$\Delta Q = 90 - 100 = -10$

$\frac{\Delta Q}{Q_1} = \frac{-10}{100} = -0.1$

$\Delta P = 30 - 40 = -10$

$\frac{\Delta P}{P_1} = \frac{-10}{40} = -0.25$

$E_s = \frac{-0.1}{-0.25}$

$E_s = 0.4$

This question was dropped by NTA.

2025: 30 May Shift 1

What will be elasticity of demand of a commodity when its price rises by 20% and quantity demanded falls from 125 units to 75 units?

2025: 31 May Shift 1

When the price elasticity of supply is equal to zero. Then..........

2026: 23 May Shift 1

If there is excess demand in the market, the price would tend to change. How would the demand change to bring the market back to the equilibrium?

2025: 26 May Shift 2

Match List-I with List-II

List-I	List-II
(A) Increase in demand > Increase in Supply	(I) Increase in both equilibrium price and quantity.
(B) Increase in demand < Increase in Supply	(II) Decrease in both equilibrium price and quantity.
(C) Increase in demand = Increase in Supply	(III) Decrease in equilibrium price but increase in equilibrium quantity.
(D) Decrease in demand < Decrease in supply	(IV) Increase in equilibrium quantity but no change in equilibrium price.

Choose the correct answer from the options given below:

2025: 26 May Shift 2

Price ceilings are also known as............

2025: 30 May Shift 1

Match List-I with List-II

Change in Demand or Supply	Effect on equilibrium price / equilibrium quantity
(A) Increase in demand > Increase in supply	(I) equilibrium price will rise but no change in equilibrium quantity.
(B) Increase in supply when demand is perfectly inelastic	(II) No change in equilibrium price.
(C) Same proportion of increase in demand and supply	(III) equilibrium price will fall but no change in equilibrium quantity.
(D) Increase In demand when supply is perfectly inelastic	(IV) equilibrium price and quantity will rise.

Choose the correct answer from the options given below:

Solution