MGT207 Business Statistics

Business StatisticsTU Board 2079

Consider the following supply schedule: Points:ABCDEPrice (Rs):010203040Supply (Units):100200300400500 a. Compute the price elasticity of supply at movement from B to D and D to B by proportion…

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Consider the following supply schedule: Points:ABCDEPrice (Rs):010203040Supply (Units):100200300400500 a. Compute the price elasticity of supply at movement from B to D and D to B by proportion method. [4] b. Compute the price elasticity of supply at midway between B and D and D and B by arc method. Why is arc method considered as more appropriate method than proportion method? [4+2] c. How do firms use price elasticity of demand in business decision making? Explain with suitable examples. [5]

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