Perfectly elastic supply, Managerial Economics

Perfectly Elastic Supply

Supply is said to be perfectly or infinitely elastic if the price is fixed at all levels of demand.  The demand curve has been shown in the above diagram for the sake of clarity.

If the supply is perfectly elastic, the supply curve is a horizontal straight line and the elasticity of supply is equal to infinity.

When demand increases from quantity supplied increases but price stays fixed .  Conversely, if demand falls, quantity supplied falls  but price stays fixed.

This is the case of Government price control.

Posted Date: 11/27/2012 6:52:14 AM | Location : United States







Related Discussions:- Perfectly elastic supply, Assignment Help, Ask Question on Perfectly elastic supply, Get Answer, Expert's Help, Perfectly elastic supply Discussions

Write discussion on Perfectly elastic supply
Your posts are moderated
Related Questions
Meaning of Inflation There has been a proliferation of definitions of inflation. Many of these definitions, however, embody the description of the processes by which the underl

Gross Domestic Product A measure of national economic activity, GDP is measured from two approaches. GDP can be viewed as the total value of all goods and services produced in

FUNCTIONS OF CENTRAL BANK Economists and financial experts lack in unanimity about the functions of a central bank. According to Kisch and Elkin, the essential function of a c

Definition of Elasticity Is defined as the ratio of the relative change of one (dependent) variable to changes in another (independent) variable, or it's a percentage change o

electron control,inc.,cells voltage regulators to other manufacturers , who then customize and distribute the products to quality assurance labs for their sensitive test equipment.

KEYNESIAN AND NEW-KEYNESIAN THEORIES OF UNEMPLOYMENT AND THE BEHAVIOUR OF REAL WAGES    As  mentioned  above, two  phenomena  about the  labour market  need  to  be explained:


State the Traditional demand theory So an over-simplified and the most commonly stated demand function is: Dx = f (PX) thatconnotes that demand for commodity X is the function

Theory of Consumer Behaviour Through the study of theory of consumer behaviour we can be able to explain why consumers buy more at a lower price than at a higher price or put

If the landfill described in Example had a compacted density of 600 Kg/m3 a refuse  depth of 9 m (29.5 ft), a moisture content of 20% by volume, and a 1-m  (3.25-ft)-thick clay cov