PRC-3 · Chapter 11 · Question 38 of 57
If an upward-sloping straight-line supply curve passes exactly through the origin (0,0) of the graph, what is its Price Elasticity of Supply (PES) at all points?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) PES is exactly 1 (Unitary elastic)
Explanation
A geometric rule of supply states that any straight-line supply curve passing directly through the origin has a unitary price elasticity of supply (PES = 1) at all points.
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