Tag: economics

True.
The price will remain unchanged under a perfectly elastic supply curve, no matter demand increases or decreases. This is because supply responds proportionately to the increase or decrease in demand, i.e., it only changes on the quantity axis, while, it is static on the price axis at a given price.

Elasticity of supply measures the degree of responsiveness of the quantity supplied of a commodity to a change in its price.

Elasticity of supply is the counterpart to the elasticity of demand, as both measure the responsiveness of quantity to price changes for their respective curves.

Unitary elasticity occurs when the percentage change in quantity supplied is exactly equal to the percentage change in price.

A supply curve that intersects the quantity (X) axis has an elasticity of supply less than one at all points on the curve.

Es = (% change in Q) / (% change in P). % change in Q = (500/1000)*100 = 50%. % change in P = (3000/12000)*100 = 25%. Es = 50/25 = 2.

Elasticity of supply is the ratio of percentage change in quantity to percentage change in price. Es = 9 / 6 = 1.5. The negative signs cancel out because elasticity of supply is generally positive.

Es = (% change in Q) / (% change in P) = 8 / 6 = 1.33.

Given Q = -100 + 10P. At P=15, Q = -100 + 150 = 50. The derivative dQ/dP = 10. Point elasticity = (dQ/dP) * (P/Q) = 10 * (15 / 50) = 10 * 0.3 = 3.