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

Currency swaps, Currency Swaps If the currency of one country is not c...

Currency Swaps If the currency of one country is not convertible, the central banks o f the two countries can exchange their currencies, and the country with the non-convertib

Concept of isocost, The concept of isocost In the use of resources, fi...

The concept of isocost In the use of resources, firms are faced with opportunity cost.  For every addition of say capital, they must forego a unit of say labour. Expositio

The law of diminishing returns (law of variable proportions), THE LAW OF DI...

THE LAW OF DIMINISHING RETURNS  (LAW OF VARIABLE PROPORTIONS) One of the most important and fundamental principles involved in economics called the law of diminishing return

Methods of demand forecast, No demand forecasting method is 100% accurate. ...

No demand forecasting method is 100% accurate. Collective forecasts develop precision and reduce the probability of huge mistakes.  Methods which relay on Qualitative Assessmen

Phillips curve, PHILLIPS CURVE   The Phillips  curve,  named  after  A....

PHILLIPS CURVE   The Phillips  curve,  named  after  A.  W.  Phillips,  describes  the  relationship between unemployment  and  inflation. In  1958  Phillips, then  professor a

The determination of the value money, The Determination of the Value Money ...

The Determination of the Value Money   Since money is primarily a medium of exchange, the value of money means what money will buy.  If at one time a certain amount of money

Plot the demand schedule and draw the demand curve for the d, Plot the dema...

Plot the demand schedule and draw the demand curve for the data given for Marijuana in the caseabove.

What do you mean by theory of firm, Q. What do you mean by Theory of Firm? ...

Q. What do you mean by Theory of Firm? Microeconomics especially the theory of firm, assumed importance and attracted considerable attention in the early 20 th century. This sh

Explanation of business cycle, Causes There are a number of explanatio...

Causes There are a number of explanations of the business cycle but changes in the level of investment seem to be the most likely.  In the simplest Keynesian model an increase

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