From point L to point M, the price rises from $10 to $11, while the Qs rises from 80 to 88:
544

The supply curve has unitary elasticity in this area.

From point N to point P, the price rises from $12 to $13, and Qs rises from 95 to 100:

The supply curve is inelastic in this region of the supply curve.

3. The demand curve with constant unitary elasticity is concave because the absolute value of declines in

price are not identical. The left side of the curve starts with high prices, and then price falls by smaller

amounts as it goes down toward the right side. This results in a slope of demand that is steeper on the left

but flatter on the right, creating a curved, concave shape.

4. The constant unitary elasticity is a straight line because the curve slopes upward and both price and

quantity are increasing proportionally.

5. Carmakers can pass this cost along to consumers if the demand for these cars is inelastic. If the demand
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