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Question
Draw a well-labelled diagram showing the price elasticity of supply of a commodity starting from the origin.
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Solution
A straight line supply curve intersects the point of origin when the percentage change in supply equals the percentage change in price. This is a known unit elastic, with Es equal to one.
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RELATED QUESTIONS
With the help of a suitable diagram, explain the following degree of elasticity of supply.
Es = ∞
Define a relatively elastic supply.
When the price increases by 50% and the supply increases only by 5% the price elasticity of supply of that commodity will be ______.
Identify the correct sequence of alternatives given in Column II by matching them with respective terms in Column I:
| Column I | Column II |
| A. Perfectly Inelastic | (i) Es > 1 |
| B. Perfectly Elastic | (ii) Es < 1 |
| C. Inelastic | (iii) Es = 0 |
| D. Highly Elastic | (iv) Es = infinity |
Choose the correct alternative:
Define elasticity of supply.
Give the meaning of perfectly elastic supply.
Give the meaning of perfectly inelastic supply.
Draw the supply curve showing price elasticity of supply equal to one.
Identify and define the degree of price elasticity of supply from the diagram for the supply curves S1, S2, S3, S4.
Explain the percentage method of measuring price elasticity of supply.
