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vodomira [7]
4 years ago
7

When does the elasticity of supply of commodity called equal to unity?

Business
1 answer:
Gemiola [76]4 years ago
3 0

Answer:

When a percentage change in price leads to the same percentage change in the quantity supplied. This means that supply is unit elastic

Explanation:

Price elasticity of supply measures the responsiveness of quantity supplied to changes in price of the good.

Price elasticity of supply = percentage change in quantity supplied / percentage change in price

Supply is unit elastic if a small change in price has an equal and proportionate effect on quantity supplied.

For example, a 20% increase in price leads to 20% increase in the quantity supplied

Elasticity of supply = 20% / 20% = 1

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<em>Hope this helps :)  </em>

<em>Pls make brainliest :3  </em>

<em>And have an amazing day <3</em>

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