10. refer to figure 5-6. along which of these segments of the supply curve is supply most elastic? a. ab b…

10. refer to figure 5-6. along which of these segments of the supply curve is supply most elastic? a. ab b. cd c. ac d. ef

10. refer to figure 5-6. along which of these segments of the supply curve is supply most elastic? a. ab b. cd c. ac d. ef

Answer

Explanation:

Step1: Recall elasticity formula

Elasticity of supply ($E_s$) is given by $\frac{%\text{ change in quantity supplied}}{%\text{ change in price}}$. A flatter - looking segment of the supply curve is more elastic and a steeper - looking segment is less elastic.

Step2: Analyze segments

Segment AB is relatively steep. Segment CD is also relatively steep. Segment AC is a combination of two steeper - looking segments. Segment EF is the flattest among the given segments. A flatter supply - curve segment implies that a small change in price leads to a large change in quantity supplied, which means higher elasticity.

Answer:

d. EF