Economics Elasticity Of Supply Questions
If the price elasticity of supply is equal to 1, it means that the quantity supplied is perfectly responsive to changes in price. In other words, a 1% increase in price will result in a 1% increase in quantity supplied, and a 1% decrease in price will result in a 1% decrease in quantity supplied. This indicates a unitary elastic supply, where the percentage change in quantity supplied is equal to the percentage change in price.