The elasticity of supply of product X is unitary if the price of X rises by
A)4 percent and quantity supplied rises by 6 percent.
B)7 percent and quantity supplied rises by 7 percent.
C)12 percent and quantity supplied stays the same.
D)5 percent and quantity supplied rises by 2 percent.

Question

Quizplus · Accepted Answer

Unitary elasticity of supply occurs when the percentage change in quantity supplied is equal to the percentage change in price, which is the case in option B (7% increase in both price and quantity supplied).

The Elasticity of Supply of Product X Is Unitary If