Question

When the tangent drawn to the supply curve at a point passes through the origin, the elasticity of supply at that point is ______.

Options

• Unitary elastic (Es = 1)

• Perfectly elastic (Es = ∞)

• Perfectly inelastic (Es = 0)

• Zero

Answer 1

When the tangent drawn to the supply curve at a point passes through the origin, the elasticity of supply at that point is Unitary elastic (Es = 1).

Explanation:

If the tangent passes through the origin, the supply is unitary elastic at that point (Es = 1).