Home » mcq » Economics » A supply curve will have a price elasticity equal to 1 only when it is
a straight line with a positive intercept
a straight line with a negative intercept
a straight line passing through the origin
horizontal
Answer is Wrong!
Answer is Right!
The correct answer is D. A supply curve will have a price elasticity equal to 1 only when it is horizontal.
A horizontal supply curve is a straight line that is parallel to the horizontal axis. This means that the quantity supplied is perfectly elastic, or
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that the quantity supplied will change by an infinite amount in response to a change in price.
A straight line with a positive intercept is a supply curve that slopes upward from left to right. This means that the quantity supplied increases as the price increases.
A straight line with a negative intercept is a supply curve that slopes downward from left to right. This means that the quantity supplied decreases as the price increases.
A straight line passing through the origin is a supply curve that has a slope of 0. This means that the quantity supplied does not change in response to a change in price.
In conclusion, a supply curve will have a price elasticity equal to 1 only when it is horizontal.