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A supply curve has constant unitary elasticity at every point. Moving up the curve, quantity increases by the same absolute amount, 30 units, at every step, while the percentage increase shrinks from 33.3 percent to 25 percent to 16.7 percent. What shape does this supply curve have?
AA curved line, concave in shape
BA straight line up from the origin
CA straight vertical line
DA downward-sloping straight line
Answer & Solution
Correct answer: B. A straight line up from the origin
1. Unlike the demand curve case, a supply curve with constant unitary elasticity is a straight line, not a curve.
2. This straight line reaches up from the origin.
3. Along it, the percentage increase in quantity supplied always exactly matches the percentage increase in price.
4. A vertical line would mean zero elasticity of supply, and a downward-sloping supply line is not a case .
_Source: OpenStax Principles of Microeconomics for AP Courses (CC BY 4.0), Ch 5 "Elasticity", section 5.2 | Polar Cases of Elasticity and Constant Elasticity_
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