A linear,upward-sloping supply curve has
A)a constant slope and a changing price elasticity of supply.
B)a changing slope and a constant price elasticity of supply.
C)both a constant slope and a constant price elasticity of supply.
D)both a changing slope and a changing price elasticity of supply.

Question

Quizplus · Accepted Answer

A linear, upward-sloping supply curve has a constant slope, but a changing price elasticity of supply. As prices rise, firms are incentivized to produce more, but this does not necessarily mean that they can do so at the same cost per unit. Therefore, the price elasticity of supply changes along the curve.

A Linear,upward-Sloping Supply Curve Has