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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
What is the formula for percentage method of calculating price elasticity of supply?
A 10 per cent increase in price of a good causes 5 per cent increase in its quantity supplied, elasticity of supply will be ______.
The given diagram is a case of ______ supply.
Pick the option which does not belong to the group.
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:
Assertion (A): In case of perfectly inelastic supply, supply curve is a vertical straight line supply curve.
Reason (R): Supply does not change with change in price in case of Es = 0.
When is the supply of a commodity is called elastic?
Draw and briefly explain a perfectly elastic supply curve.
Draw the supply curve showing price elasticity of supply less than one.
Draw and explain the following degree of elasticity of supply.
Ep > 1
