What does a price elasticity of supply equal to 1 indicate?

Economics Supply And Demand Questions



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What does a price elasticity of supply equal to 1 indicate?

A price elasticity of supply equal to 1 indicates that the quantity supplied is perfectly responsive to changes in price. In other words, a 1 elasticity suggests that a 1% increase in price will result in a 1% increase in quantity supplied, and vice versa.