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Question
What is perfectly elastic supply?
Solution
Perfectly elastic supply is a situation where a small change in price leads to an infinite change in quantity supplied. Here, the supply curve is a horizontal straight line rising from the Y-axis, i.e. Es > 1.
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RELATED QUESTIONS
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| Group A | Group B |
| 1) Perfectly Elastic Supply | a. Vertical supply curve |
| 2) Stock | b. Horizontal supply curve |
| 3) Increase in supply | c. Potential supply |
| 4) Perfectly Inelastic supply | d. Rightward shift in supply curve |
| 5) `"TC"/"TQ"` | e. Leftward shift in |
| f. Average cost |
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Geometric Method is also known as Point Method.
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Output
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Price is the only determinant of supply.
Give reason or explain the following.
Law of supply is not applicable to rare articles.
