• If supply curve has a positive intercept• Price elasticity of supply decreases as Q increases– Graph shows• Slope = 2• At A, P = 8 and Q = 2– Price elasticity of supply = (8 / 2) (1 / 2) = 2.00• At B, P = 10 and Q = 3– Price elasticity of supply = (10 / 3) (1 / 2) = 1.67