A 10% increase in the price of a good causes a 10% decrease in quantity supplied. The supply curve is a _______.

straight line passing through the origin

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straight line not passing through the origin

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straight line parallel to the x-axis

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rectangular hyperbola

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Solution

The correct option is A
straight line passing through the origin

$ϵ_{s} = \frac{% change in quantity}{% change in price} = \frac{10}{10} = 1$

Unit elastic supply curves are straight lines passing through the origin.

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