What will be the shape of unitary elastic supply curve? |
45° upward sloping line. A straight upward sloping line intercepting X axis. downward sloping line. A downward sloping line passing through the origin. |
45° upward sloping line. |
The correct answer is Option (1) → 45° upward sloping line. When supply is unitary elastic, it means that the percentage change in quantity supplied is exactly equal to the percentage change in price. Graphically, this relationship is shown by a straight line passing through the origin that makes a 45° angle with the X-axis. This is because at every point on this line, the proportionate change in price and quantity supplied remains the same, keeping elasticity of supply equal to 1. |