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Question
Identify the correct pair of items from the following Columns I and II:
Columns I | Columns II |
(1) Perfectly elastic supply | (a) Es > 1 |
(2) Perfectly inelastic supply | (b) Es < 1 |
(3) Unitary elastic supply | (c) Es = 1 |
(4) Relatively elastic supply | (d) Es = 0 |
Options
1 - (a)
2 - (b)
3 - (c)
4 - (d)
MCQ
Solution
3 - (c)
Explanation:
The percentage change in quantity supplied is equal to the percentage change in price in the case of unitary elastic supply. As a result, supply elasticity is one.
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