Economics Elasticity Of Supply Questions
The difference between perfectly elastic and unitary elastic supply lies in the responsiveness of quantity supplied to changes in price.
Perfectly elastic supply refers to a situation where a small change in price leads to an infinite change in quantity supplied. In other words, the supply is extremely sensitive to price changes, and suppliers are willing to supply any quantity at a given price. The supply curve for a perfectly elastic supply is horizontal.
On the other hand, unitary elastic supply refers to a situation where a change in price leads to an equal percentage change in quantity supplied. In this case, the supply is proportionate to price changes, and suppliers are willing to adjust their quantity supplied accordingly. The supply curve for a unitary elastic supply is upward sloping, but not as steep as a perfectly elastic supply curve.