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

National income accounting, NATIONAL INCOME ACCOUNTING This refers to ...

NATIONAL INCOME ACCOUNTING This refers to the measuring of the total flow of output (goods and services) and of the total flow of inputs (factors of production) that pass thro

Sales maximization, how realistic is the sales maximisation model from your...

how realistic is the sales maximisation model from your experience with business objectives as persued by firms

Will you make any profits in the short run, Problem 1: Using relevant e...

Problem 1: Using relevant examples, discuss the pricing strategies that firms can use to capture value from their customers. Problem 2: You are a manager in a perfectl

Inflation, Meaning The word inflation has at least four meanings. ...

Meaning The word inflation has at least four meanings. A persistent rise in the general level of prices, or alternatively a persistent falls in the value of money.

State the meaning of managerial economics, State the Meaning of managerial ...

State the Meaning of managerial economics Managerial economics, used synonymously with business economics, is a study of economics that deals with the application of microecono

Short run cost function, how much output should a firm produce? 80$ per uni...

how much output should a firm produce? 80$ per unit C(Q)=40+8Q+2Qsquared

Difference between a static budget and a flexible budget, 1.  What is the d...

1.  What is the difference between a static (master) budget and a flexible budget? Ans:  static budget is where a budget doesn't change a volume changes.  An example could be th

Avoiding surplus and inadequate production, Q. Avoiding Surplus and Inadequ...

Q. Avoiding Surplus and Inadequate Production? Demand forecasting is essential for the new and old organisations. It is somewhat necessary if an organisation is engaged in larg

Policy conflicts, Policy conflicts In their attempts to achieve the po...

Policy conflicts In their attempts to achieve the policy objectives, governments often face what are called conflict of objectives.  These arise partly because unlike private

Explain about regression analysis, Q. Explain about Regression analysis? ...

Q. Explain about Regression analysis? Regression analysis is the statistical technique which identifies the relationship between two or more quantitative variables: a dependent

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