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.
Was this answer helpful?
Important Questions from Economy
When goods are produced by exploiting natural resources, it is an activity associated with:
A system in which local farmers were allowed to cultivate temporarily within a plantation is known as:
Which goods from India dominated the international textile markets before the age of mechanized industries?
Which type of farming is practiced in areas of high population pressure on land?
The major economic attribute for comparing countries is their:
Need Expert Advice?
