Q. 135.0( 1 Vote )

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Answer :

a) Elasticity of Supply at point L = Supply Curve intercept on X-axis/ Supply at point L

Draw a perpendicular from point L on the axis, say at OQ,


The intercept of the supply curve coincides with the origin. Therefore, Es at point= OQ/OQ = 1


b)


Profit is the return that the producer gets from his capital invested in the business. Total costs include payments done for the primary input.


Total cost =implicit cost+ explicit cost


Implicit cost: Costs owned by the producer for the resources.


Explicit costs: the cost of hiring labour, purchasing raw material etc.


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