If the price elasticity of supply in the kiwi fruit industry equals 1, supply is
A)perfectly elastic
B)relatively elastic
C)unit elastic
D)relatively inelastic
E)perfectly inelastic

Question

Quizplus · Accepted Answer

A price elasticity of supply of 1 indicates that the percentage change in quantity supplied is equal to the percentage change in price, which is characteristic of unit elasticity. In other words, when the price changes, producers will increase or decrease their supply by the same percentage as the change in price.

If the Price Elasticity of Supply in the Kiwi Fruit