If price increases 6% and the quantity exchanged decreases 6%, what does that tell us about the elasticity of supply?
A)It tells us nothing about the elasticity of supply.
B)Supply is elastic.
C)Supply is inelastic.
D)Supply is unit elastic.

Question

If price increases 6% and the quantity exchanged decreases 6%, what does that tell us about the elasticity of supply?
A)​It tells us nothing about the elasticity of supply.
B)​Supply is elastic.
C)​Supply is inelastic.
D)​Supply is unit elastic.

Quizplus · Accepted Answer

The question states that the price increases 6% and the quantity exchanged decreases 6%. This means that the percentage change in quantity is equal to the percentage change in price, which indicates that the supply is unit elastic.

If Price Increases 6% and the Quantity Exchanged Decreases 6