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

Gm04, “Managerial economics involves use of economic analysis to make busin...

“Managerial economics involves use of economic analysis to make business decisions involving the best use of a firm’s scarce resources” Explain the statement with suitable example.

At what price will demand for product be unitary elastic, Suppose you have ...

Suppose you have estimated the following demand function for the product you sell: Q = 5 - 0.2P At what price will the demand for your product be unitary elastic? (Hint: B

Factors influencing exchange rates, Factors influencing Exchange Rates ...

Factors influencing Exchange Rates i.  Inflation:   Other things being equal, a country experiencing a high rate of inflation will experience a lower demand for its goods whil

Gatt & wto, introduction, evaluation,principle, activities concept behind G...

introduction, evaluation,principle, activities concept behind Gatt & wto

Decision tree construction of a fast food outlet, construct a decision tree...

construct a decision tree for the baked potatoes outlet using sales per day, number of days that quantity is sold together with selling prices per unit and average costs

Trade unions, TRADE UNIONS Trade unions are workers' organizations who...

TRADE UNIONS Trade unions are workers' organizations whose objective is to protect the interests of their members. Functions i.       To bargain on behalf of their mem

Determinants of price elasticity, Discuss the determinants of price elastic...

Discuss the determinants of price elasticity of demand

What is increasing marginal cost, What is increasing marginal cost? Fel...

What is increasing marginal cost? Felix’s marginal cost is greater the more lawns he has previously mowed. It is, every time he mows a lawn, the extra cost of doing still anoth

Show the long term goals - demand forecast, Q. Show the Long Term Goals - D...

Q. Show the Long Term Goals - Demand forecast? Long Term Goals:   If the demand forecast period is more than a year, in that scenario it's termed as long term forecast. Follow

Unemployment rate to the desired level, Suppose that the present level of i...

Suppose that the present level of income in the economy is $700 billion. It is determined that in order to decrease the unemployment rate to the desired level, it will be essential

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