Question:
The two supply curves in the diagram are parallel. In the price range between Rs. 30 and Rs. 40:
(1) the curve $S_{1}$ is more price elastic than the curve $S_{2}$.
(2) the curve $S_{2}$ is more price elastic than the curve $S_{1}$.
(3) curves $S_{1}$ and $S_{2}$ have the same price elasticity.
(4) price elasticity values of curve $S_{1}$ are positive, but less than 1.
(5) price elasticity values of curve $S_{2}$ are positive, but more than 1.
Correct Answer:
(1)
Answer Explanation:
For two parallel upward-sloping supply curves, the curve closer to the price axis ($S_{1}$) has a higher price elasticity of supply at any given price level than the curve further to the right ($S_{2}$).
Topic: Elasticity Year: 2023
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