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

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BlackTom AI · Accepted Answer

First, recall the concept: price elasticity of supply measures how responsive the quantity supplied is to a change in price. On a linear (straight-line) supply curve, the elasticity of supply varies along the curve; it is generally lower (more inelastic) where quantity supplied is small and higher (more elastic) where quantity supplied is large.

Option a. AC: This segment is not described in the prompt, but if it represents a portion farther along the curve with a larger quantity supplied, the elasticity would typically be higher than on the very early segments, meaning more responsiveness to price changes. Therefore this could be more elastic than AB, not the least.

Option b. GH: Depending on the graph labeling, GH could be a mid-to-late segment where quantity is moderate to high. In many linear supply scenarios, mid or high-quantity segments have greater elasticity than the very start of the curve, so GH would tend to be more elastic than AB.

Option c. AB: This is the first, leftmost portion of the supply curve where quantity supplied is small and prices are relatively high. On this initial segment, producers typically respond less to price changes because capacity constraints, fixed inputs, or limited available producers keep the response limited. Thus the elasticity of supply is the smallest here, making AB the least elastic.

Option d. CD: If CD lies further to the right with higher quantity supplied, the elasticity tends to be larger. Therefore CD would usually be more elastic than AB, not less.

In summary, the core idea is that the early segment of the supply curve (AB) generally exhibits the least responsiveness to price changes due to low output levels and potential rigidity, whereas later segments (like CD or GH) show greater responsiveness as quantity adjustments become easier. This aligns with AB being the least elastic on the given figure.

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

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