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

Illustrate about pecuniary economies, Q. Illustrate about Pecuniary economi...

Q. Illustrate about Pecuniary economies? Pecuniary economies (which is monetary economies) are those economies accrued by the firm from paying lower prices for the factors used

Contracting and insider-outsider models of unemployment, CONTRACTING AND IN...

CONTRACTING AND INSIDER-OUTSIDER MODELS OF UNEMPLOYMENT   From  the  Walrasian  assumption  of  a market-clearing wage  on  efficiency considerations  -  it was  postulated  th

What wage will the firm pay, A firm faces a perfectly elastic demand for it...

A firm faces a perfectly elastic demand for its output at a price of $6 per unit of output. The firm, Though, faces an upward-sloped labor supply curve of          E= 20w-120 W

What do you mean by ordinal utility, Q. What do you mean by Ordinal utility...

Q. What do you mean by Ordinal utility? A method of analysing utility or satisfaction derived from consumption of services andgoods, based on a relative ranking of services and

Coefficient on education, Let Consider the following (familiar) equation wh...

Let Consider the following (familiar) equation which estimates the number of hours of sleep / year  that someone gets as a function of hours worked / year (total work), education (

Opportunity costs, When Burton Cummings graduated with honors from the Cana...

When Burton Cummings graduated with honors from the Canadian Trucking Academy, his father gave him a $350,000 tractor-trailer rig. Recently, Burton was boasting to some fellow truc

Excise tax and its impact on manufacturing industry, excise tax and its imp...

excise tax and its impact on manufacturing industry with respect to demand and supply curves

Analysis of team production, Q. Analysis of team production? Harold Dem...

Q. Analysis of team production? Harold Demsetz and Armen Alchian's analysis of team production is a clarification and amplification of earlier work by Coase. According to them,

Types of budgets, TYPES OF BUDGETS 1.     Deficit budget   If th...

TYPES OF BUDGETS 1.     Deficit budget   If the proposed expenditure is greater than the planned revenue from taxation and miscellaneous receipts, this is a budget defic

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