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

What are the different channels of monetary policy, Question 1: a. What...

Question 1: a. What are the different channels of monetary policy? b. Discuss why the channels of monetary policy are likely to change in the wake of financial liberaliz

What are the environmental issues factors, Environmental issues factors ...

Environmental issues factors This is governed by the below factors:  The type of economic system of the country Business cycles Industrial policy of the countr

Explain cost output relationship, Explain cost output relationship with ref...

Explain cost output relationship with reference to: a.    Total fixed cost and output b.    Total variable cost  and output

Mba programme, write a note on marris growth maximising model?

write a note on marris growth maximising model?

Elasticity.., elasticity concepts occupies a central place in policy formul...

elasticity concepts occupies a central place in policy formulation explain in details

Calculate the disk capacity and maximum data transfer rate, Consider a magn...

Consider a magnetic disk consisting of 16 heads and 400 cylinders. This disk is divided into four 100-cylinder zones with the cylinders in different zones containing 160, 200, 240,

Consumption function, The Consumption Function The consumption functio...

The Consumption Function The consumption function is the relationship  [expressed in mathematical or diagrammatic form] between planned consumption and other independent varia

Brief note, principles of time perspectives

principles of time perspectives

Elasticity of demand, A baseball team is trying to predict ticket sales for...

A baseball team is trying to predict ticket sales for the upcoming season. They are also considering increasing prices. The market has a population of 2 million persons. The team s

Decrease in demand - effect on equilibrium price, Decrease in Demand ...

Decrease in Demand At the initial equilibrium price P 1 , quantity demanded falls from q 1 to q d .  But the quantity supplied is still q 1 at this price.  Hence, this

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