Question

Give the meaning of perfectly inelastic supply.

Draw and explain the following degree of elasticity of supply.

Ep = ∞

Answer 1

If there is no change in quantity supplied with changes in the price of the product, then the supply of that commodity becomes perfectly inelastic (i.e., E5 = 0). The supply curve will be a vertical line. This refers to when only one quantity can be supplied at any given price. The shape of perfectly inelastic supply is shown below.

The supply of genuine antique furniture is perfectly inelastic. Its supply cannot be changed. Antique furniture sellers cannot increase or decrease the amount of postage furniture they produce. Likewise the supply of rare books, stamps, old coins etc. is of this type.