Supply is unit elastic when the
A) percentage change in the quantity supplied equals the percentage change in price.
B) supply curve is upward sloping.
C) supply curve is horizontal.
D) supply curve is vertical.
E) price elasticity of supply is positive.

Question

Quizplus · Accepted Answer

Unit elasticity occurs when the percentage change in the quantity supplied is equal to the percentage change in price. This means that as the price of the good increases, the quantity supplied by producers increases by the same percentage, resulting in a constant elasticity of supply of 1.

Supply Is Unit Elastic When the