If the elasticity of supply of bangles is equal to 1, moving along the supply curve for bangles, an increase in price will:
A)not affect the quantity purchased.
B)increase the quantity supplied and increase total revenue.
C)increase the quantity supplied and decrease total revenue.
D)increase the quantity supplied and leave total revenue unchanged.

Question

Quizplus · Accepted Answer

When the elasticity of supply is equal to 1, it means that the percentage change in quantity supplied is equal to the percentage change in price. Therefore, an increase in price will lead to a proportional increase in quantity supplied, resulting in an increase in total revenue.

If the Elasticity of Supply of Bangles Is Equal to 1