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

Question

Quizplus · Accepted Answer

Unit elasticity of supply means that the percentage change in the quantity supplied is equal to the percentage change in price. This occurs when the supply curve is neither perfectly elastic (horizontal) nor perfectly inelastic (vertical). Therefore, choice C is the correct answer.

Supply Is Unit Elastic When the