Question

State and explain the elasticity of supply when a straight line supply curve passes through the origin O.

Answer 1

When the percentage change in a commodity’s quantity supplied is precisely equal to the percentage change in its price, this is known as unitary elasticity of supply. In this instance, the elasticity of supply will have a numerical value of 1. The supply curve with unitary elasticity is shown in the figure. Regardless of its slope, the elasticity of any straight-line supply curve that passes through the origin is unity throughout. As a result, unitary elasticity is present at every point in the supply curves S₃ and S₄.