Perfectly elastic supply, Managerial Economics

Assignment Help:

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.


Related Discussions:- Perfectly elastic supply

Simplified reorder system, determine points in units and reorder quantity n...

determine points in units and reorder quantity normal sales=2 month; reorder time=15days; max stock=6 units; safety stock=1 unit ( based on 95% customer''s satisfaction )

Objectives of government in economy, OBJECTIVES OF GOVERNMENT Governme...

OBJECTIVES OF GOVERNMENT Government policies are required in market economies to achieve certain goals.  There are broadly two types of government policies viz; Microeco

what is the elasticity of labor demand , Asuume there are two inputs in th...

Asuume there are two inputs in the production function, labor & capital, and these two inputs are perfect substitutes. The existing technology permits one machine to do the work of

International financial institutions, INTERNATIONAL FINANCIAL INSTITUTIONS ...

INTERNATIONAL FINANCIAL INSTITUTIONS In July 1944, a conference took place at Bretton Woods in New Hampshire to try to establish the pattern of post-war international monetary

Direct taxes, DIRECT TAXES A direct tax is one where the impact and ...

DIRECT TAXES A direct tax is one where the impact and incidence of the Tax is on the same person e.g. Income Tax, death or estate duty, corporation taxes and capital gains

Average propensity to save, Average Propensity to save The Average Pro...

Average Propensity to save The Average Propensity to Save [APS] is defined as the fraction of aggregate national income which is devoted to savings.  Thus if S denotes savin

Describe the application of economic theories, Describe the Application of ...

Describe the Application of economic theories Pertinent business decisions necessitate an unambiguous understanding of the environmental and technical conditions under which bu

Perfectly inelastic (zero elastic) supply, Perfectly Inelastic (Zero Elasti...

Perfectly Inelastic (Zero Elastic) Supply Supply is said to be perfectly inelastic if the quantity supplied is constant at all prices.  The supply curve is a vertical straight

What do you mean by cost function, Q. What do you mean by Cost Function? ...

Q. What do you mean by Cost Function? Cost function is a derived function. It's derived from the production function that describes the efficient method of production at any gi

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd