Question
The price elasticity of a linear supply curve through the origin is
The correct answer is
Unity
For a linear supply curve through the origin, \(Q=bP\) with \(b>0\). At a positive price:
\(E_s=\frac{dQ}{dP}\frac{P}{Q}=b\frac{P}{bP}=1\)
Hence the price elasticity of supply is unity.
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