Answer:
As given in the question, \[Q_{{}}^{s}=10,\,\,P=5\] and \[E_{{}}^{s}=1.25\] At new price of Rs. 7 per unit \[\Delta P=7-5=2\] We know, \[E_{{}}^{s}=\frac{\Delta Q}{\Delta P}\times \frac{P}{Q}\] or, \[1.25=\frac{\Delta Q}{2}\times \frac{5}{10}\] or, \[Q=1.25\times 4=5\] Thus, the new quantity that the firm would supply at a price of Rs. 7 per unit is 15(5+10).
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