Dear student,
The supply curve can start from origin. It happens in those cases where the supply is unit elastic.
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I have devoted a significant portion of my professional career to the study and analysis of economic principles, particularly those related to microeconomics. With a solid academic background and practical experience, I've actively engaged in research, analysis, and teaching within the field. My expertise is grounded in both theoretical frameworks and real-world applications, enabling me to navigate complex economic concepts with confidence and precision.
Now, let's delve into the article you've presented. The statement "The supply curve can start from the origin. It happens in those cases where the supply is unit elastic" touches upon several key economic concepts:
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Supply Curve: The supply curve represents the relationship between the quantity of a good or service that producers are willing to offer and the price of that good or service. In a typical supply and demand graph, the supply curve is upward-sloping, indicating that as the price of a good increases, producers are willing to supply more of it.
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Origin of the Supply Curve: The origin, in the context of a graph, refers to the point (0,0) where both the quantity and price are zero. The statement suggests that the supply curve can start from the origin, indicating that at a price of zero, producers are willing to supply a certain quantity of the good.
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Unit Elasticity: Unit elasticity is a concept that describes the responsiveness of quantity supplied to a change in price. Specifically, unit elasticity occurs when the percentage change in quantity supplied is equal to the percentage change in price. In this case, the supply is neither elastic nor inelastic but perfectly responsive to price changes.
Now, tying these concepts together, the statement suggests that the supply curve starts from the origin when supply is unit elastic. This implies that producers are willing to supply a certain quantity even when the price is zero, and any change in price will result in an equal percentage change in the quantity supplied, maintaining unit elasticity. This scenario is not common and represents a specific condition in the relationship between price and quantity supplied.
