GENERAL KNOWLEDGE

IF QUANTITY SUPPLIED IS CONSTANT IRRESPECTIVE OF PRICE CHANGES, THE SUPPLY ELASTICITY IS

  • A. unitary
  • B. infinity
  • C. fairly elastic
  • D. perfectly inelastic ✓

 

The answer to the question is: D. perfectly inelastic

If the quantity supplied remains constant regardless of changes in price, the supply elasticity is considered perfectly inelastic. This means that the quantity supplied does not respond at all to changes in price. In other words, the supply curve is a vertical line, indicating that no matter how much the price changes, the quantity supplied remains the same.

Perfectly inelastic supply occurs when there are no substitutes for the good or when it is impossible to produce more of the good in the short run. For example, if a certain type of rare artwork has a perfectly inelastic supply, it means that no matter how high the price goes, the quantity of that specific artwork available for sale will not increase.

In economic terms, perfectly inelastic supply is represented by a supply elasticity coefficient of 0. This indicates that a percentage change in price leads to zero percentage change in quantity supplied. Therefore, if the supply elasticity is perfectly inelastic, it would be represented as perfectly inelastic.

My moral story. Hearing god’s voice in unlikely places : aaron watson & anthony lucia.