Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Firms under Perfect Competition

Question:

Under which method ,elasticity of supply depends on the origin of the supply curve?

Options:

percentage method

geometric method

both of them

none of them

Correct Answer:

geometric method

Explanation:

The correct answer is Option 2: geometric method

In the geometric method, the elasticity of supply (Es) depends on the origin of the supply curve because:

1️⃣ Elasticity is measured using the intercept on the x-axis (quantity axis).

2️⃣ If the supply curve passes through the origin, the elasticity is always equal to 1 (unitary elastic supply).
3️⃣ If the supply curve cuts the x-axis, the supply is inelastic.
4️⃣ If the supply curve cuts the y-axis, the supply is elastic.

Thus, elasticity of supply depends on the origin in the geometric method, but not in the percentage method.