ICSE Class 10 Answered
With the help of suitable diagrams explain the following degree of
elasticity of supply.
E p
= ∞
E p
> 1
Asked by Topperlearning User | 28 Apr, 2015, 03:01: PM
Expert Answer
Degree of elasticity of supply:
- Ep = ∞
Supply is said to be infinite when Ep = ∞. Infinite elasticity of supply refers to a horizontal straight line supply curve which shows infinite supply corresponding to a particular price of the commodity. Figure (a) shows that quantity supplied is infinite when the price of the commodity is OS. It reduces to zero even when the price is slightly reduced.
- Ep > 1
Supply is said to be elastic when Ep > 1. Elastic supply refers to a straight line, positively sloped supply curve from the y-axis, irrespective of the angle it makes. Figure (b) shows that the quantity supplied is elastic, i.e. an increase in the price of the commodity from OP will lead to extension of supply.
Answered by | 28 Apr, 2015, 05:01: PM
