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Question
A linear supply curve starting from the origin making an angle of 75 degree with X-axis will have ______.
Options
Relatively elastic supply
Relatively inelastic supply
Perfectly elastic supply
Unitary elastic supply
Solution
A linear supply curve starting from the origin making an angle of 75 degree with X-axis will have unitary elastic supply.
Explanation:
A linear supply curve starting from the origin and making a steep angle (such as 75 degrees) with the X-axis indicates that the quantity supplied changes by a smaller proportion compared to changes in price. This steep curve suggests that the supply is relatively inelastic, meaning that the elasticity of supply is less than 1.
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