ECONOMICS
SUPPLY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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quantity demanded changes same amount as the change in price.
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the %change in quantity supplied/% change in price equals to ∞
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quantity supplied changes according to the same percentage as the change in price.
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the %change in quantity supplied/% change in price equals to-1
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Detailed explanation-1: -Unit Elastic Supply: A product is said to have a unit elastic supply when the change in its quantity supplied is proportionate or equal to the change in its price. The elasticity of supply, in this case, is equal to 1.
Detailed explanation-2: -Elastic means the product is considered sensitive to price changes. Inelastic means the product is not sensitive to price movements. Price elasticity of supply = % Change in Supply / % Change in Price.
Detailed explanation-3: -An inelastic demand or supply curve is one where a given percentage change in price will cause a smaller percentage change in quantity demanded or supplied. Unitary elasticity means that a given percentage change in price leads to an equal percentage change in quantity demanded or supplied.
Detailed explanation-4: -Unit elastic demand is referred to as a demand in which any change in the price of a good leads to an equally proportional change in quantity demanded. In other words, the unit elastic demand implies that the percentage change in quantity demanded is exactly the same as the percentage change in price.
Detailed explanation-5: -When percentage change in quantity demanded is equal to the percentage change in price, the elasticity of demand is unitary elastic.