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

Research methods, measurement and scaling techniques in business research

measurement and scaling techniques in business research

Function of money markets, Function of Money Markets The money markets...

Function of Money Markets The money markets are the place where money is "wholesaled".  As such the supply of money and interest rate which are of significance to the whole ec

Economic cost, The economic cost Unemployment represents a terrible wa...

The economic cost Unemployment represents a terrible waste of resources and means that the economy is producing a lower rate of output than it could do if there were full empl

Real vs nominal gnp, Real Vs Nominal GNP: "Deflating" by a price Index   ...

Real Vs Nominal GNP: "Deflating" by a price Index   One of the problems that confront economists when measuring GNP is that they have to use money as the measuring rod.  Thes

Actual income and full employment income, Actual income and Full employment...

Actual income and Full employment income Full employment income (Also called Potential National) is the national income that could be produced when the country's factors of pr

Central bank functions-controller of credit, Controller of Credit The p...

Controller of Credit The principles of credit control by the central bank were discovered and enunciated after the publication of Bagehot Lombard street in 1873. Even after 187

Analyse the equilibrium of a firm under perfect competition, We can analyse...

We can analyse the equilibrium of a firm under Perfect Competition in both the long run as well as in the short-run. SHORT RUN EQUILIBRIUM OF A FIRM UNDER PERFECT COMPETITION

Draw demand schedule and demand curve, The war on drugs is an expensive bat...

The war on drugs is an expensive battle, as a great deal of resources go into catching those who buy or sell illegal drugs on the black market, prosecuting them in court, and housi

Demand forecasting, what is the importance of demand forecasting to manager...

what is the importance of demand forecasting to managers

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