Figure 5-6Refer to Figure 5-6. Along which of these segments of the supply curve is supply least elastic?

Question

BlackTom AI · Accepted Answer

Break down the task by examining how elasticity varies along the supply curve.

First, recall that supply elasticity is higher where the quantity supplied responds a lot to price changes (flatter segments) and lower where the quantity responds little (steeper segments).

In the figure, the supply curve is drawn with multiple segments labeled A, B, C, D, G, and H as price rises from left to right. Each segment represents the change in quantity supplied for a given price interval.

Now evaluate each segment conceptually:
- A to B (low-price region): this segment appears relatively short in quantity change for a given price rise, indicating a less responsive quantity to price at low levels; elasticity is moderate but not the least yet.
- B to C and C to D (mid-price region): as we move to higher prices, the curve becomes steeper than in the A-B segment. A steeper slope implies lower elasticity compared to flatter portions.
- D to G (high-mid region): the segment remains fairly steep, showing even less responsiveness than the earlier sections.
- G to H (highest-price region): this final segment shows a noticeable price increase (from 450 to 500) accompanied by only a small additional quantity increase (G to H). The steepness here is greatest, meaning elasticity is the smallest on this segment.

Therefore, the segment with the least elastic supply is the one with the steepest slope and the smallest quantity change for a given price increase, which corresponds to the GH interval.

Answer choice analysis:
- If the option labels include GH as a segment, that segment aligns with the least elastic portion of the supply curve due to its steepness and minimal quantity response to price changes.
- Other segments (A-B, B-C, C-D, D-G) show comparatively greater responsiveness (flatter or less steep) than GH, so they are more elastic than GH.

Figure 5-6Refer to Figure 5-6. Along which of these segments of the supply curve is supply least elastic?

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