Question

If elasticity of supply equals 1, how does the percentage change in quantity supplied compare to the percentage change in price?

Options

• Quantity supplied changes less than price

• Quantity supplied changes more than price

• Quantity supplied changes equally as price

• There is no change in quantity supplied

Answer 1

Quantity supplied changes equally as price

Explanation:

When elasticity of supply is 1, the percentage change in quantity supplied is equal to the percentage change in price, showing unitary elasticity.​