What will be the shape of unitary elastic supply curve?

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → 45° upward sloping line.

Supply is unitary elastic when the percentage change in quantity supplied equals the percentage change in price. Any straight line supply curve going through the origin has this property at every point. A 45° line from the origin is one such line.

Option (1) 45° upward sloping line. — Correct. Drawn from the origin, this line has elasticity 1 at every point.
Option (2) A straight upward sloping line intercepting X axis. — Incorrect. A straight supply curve that starts from the quantity axis has elasticity less than 1 at every point.
Option (3) downward sloping line. — Incorrect. A firm’s supply curve is the rising part of its marginal cost curve, so it does not slope downward.
Option (4) A downward sloping line passing through the origin. — Incorrect. A downward line through the origin would need a negative price or a negative quantity.

Note: Option (1) does not say ‘through the origin’. It fits best because it is the only option that can be a straight line from the origin. The 45° angle itself is not what makes elasticity 1.

NCERT (2026-27): “The Geometric Method … In panel (c) we consider a straight line supply curve and S is a point on it. It cuts the quantity-axis at M which is at its positive range. Again the price elasticity of this supply curve at the point S is given by the ratio, Mq₀/Oq₀. Now, Mq₀ < Oq₀ and hence, e_S < 1. S can be any point on the supply curve, and therefore at all points on such a supply curve e_S < 1.

Now we come to panel (b). Here the supply curve goes through the origin. One can imagine that the point M has coincided with the origin here, i.e., Mq₀ has become equal to Oq₀. The price elasticity of this supply curve at the point S is given by the ratio, Oq₀/Oq₀ which is equal to 1. At any point on a straight line, supply curve going through the origin price elasticity will be one.”