When the percentage change in the quantity supplied equals the percentage change in price,the supply is
A) elastic.
B) inelastic.
C) unit elastic.
D) perfectly elastic.
E) perfectly inelastic.

Question

Quizplus · Accepted Answer

When the percentage change in the quantity supplied equals the percentage change in price, the supply is said to be unit elastic. This means that the change in price has a proportional impact on the quantity supplied. Unit elastic supply occurs when the percentage change in price is matched by the same percentage change in quantity supplied, resulting in a constant elasticity of supply. In other words, the price elasticity of supply is equal to 1, indicating that changes in price have a proportional effect on the quantity supplied.

When the Percentage Change in the Quantity Supplied Equals the Percentage