Final answer:
The elasticity of a linear, positively sloped supply curve with a positive intercept varies along the curve. It is generally inelastic near the intercept and becomes more elastic as price and quantity increase.
Step-by-step explanation:
If the supply curve is linear, positively sloped, and has a positive intercept, the price elasticity of supply indicates how responsive the quantity supplied is to a change in price. With a linear and positively sloped supply curve with a positive intercept, we generally observe that the elasticity varies along the curve. At low prices (near the intercept), the supply is inelastic since the percentage change in quantity supplied is small compared to the percentage change in price. As we move up the curve to higher prices, the same change in price results in a larger percentage change in quantity supplied, indicating that supply becomes more elastic.
For example, if we look at the segment from point L to point M where the price rises from $10 to $11 and the quantity supplied rises from 80 to 88, we can calculate the price elasticity of supply. The percentage change in quantity is (88-80)/80*100 = 10%, and the percentage change in price is (11-10)/10*100 = 10%. These equal percentage changes imply unitary elasticity in this specific segment. However, overall, the elasticity of the linear supply curve changes along its length.