The supply function for a good is $q = -50 + 5p$. Using the point method, the elasticity of supply when price is Rs 20 equals:

1. Point elasticity: $E_s = \dfrac{dq}{dp} \times \dfrac{p}{q}$. 2. Differentiate the supply function: $\dfrac{dq}{dp} = 5$. 3. At $p = 20$: $q = -50 + 5(20) = -50 + 100 = 50$. 4. $E_s = 5 \times \dfrac{20}{50} = 5 \times 0.4 = 2.0$. Forgetting the $p/q$ factor wrongly gives 5. _Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 2 Unit III "Supply", p.9_