Question

Assertion (A): Elasticity of supply of gold is unitary elastic.

Reason (R): The unitary elastic supply is equal to one R.

Options

• Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).

• Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).

• Assertion (A) is true, but Reason (R) is false.

• Assertion (A) is false, but Reason (R) is true.

Answer 1

Assertion (A) is false, but Reason (R) is true.

Explanation:

When the percentage change in quantity supplied equals the percentage change in price, the unitary elastic supply is said to be one. Because the percentage change in quantity supplied is greater than the percentage change in price, the supply elasticity of gold is higher.