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

Understanding elasticity of supply involves how responsive quantity supplied is to a change in price. In a supply curve, regions that are steepest indicate that a given change in price causes only a small change in quantity supplied, i.e., low elasticity.

- Point A (near the origin) typically sits on a flatter portion of the curve, where quantity responds more to price changes, indicating higher elasticity in that early segment.
- Point B is a bit farther along; the slope appears moderate, suggesting a moderate elasticity.
- Point C and Point D lie on segments where the curve begins to rise more steeply, implying lower elasticity than A or B but not the lowest yet.
- Point G is closer to the upper portion but still shows a significant rise in quantity with price, indicating relatively low to moderate elasticity.
- Segment H, towards the far right top, demonstrates a very steep incline; a small increase in price yields a large increase in quantity, or conversely, relatively little quantity response to price drops, which characterizes the least elastic portion of the curve.

Comparing the segments, the portion from G to H forms the steepest part of the curve, where elasticity is smallest because quantity changes are least responsive to price changes in that narrow vertical stretch. Therefore, the segment that corresponds to the least elastic supply is the one associated with the steepest incline near the top of the curve.

Note: If you are choosing among labeled segments such as A, B, C, D, G, and H, focus on which segment has the steepest slope. The steepest segment indicates the smallest elasticity of supply, whereas flatter segments indicate higher elasticity.

ECB1101 - S1 2025 Online Quiz 4

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

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