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

Search theory and unemployment, Search Theory and Unemployment   You mu...

Search Theory and Unemployment   You must understand the search and matching theories of unemployment in  the context of other theories of unemployment. With this objective  in

Price, break event point

break event point

Scarcity and oppurtunity cost, define scarcity and oppurtunity cost.show ho...

define scarcity and oppurtunity cost.show how these concepts are useful in managerial decision making

Explain mark-up pricing, Q. Explain Mark-up pricing? In addition to usi...

Q. Explain Mark-up pricing? In addition to using above methods to conclude a firm's optimal level of output, a firm can also set price to maximise profit. Optimal markup rules

Discovery of new technical know-how, Q. Discovery of new technical know-how...

Q. Discovery of new technical know-how? Growth of Technical Know-how: Expansion of an industry may result in the discovery of new technical know-how. As a result of this firm

Disadvantages of mixed economy, Disadvantages of Mixed Economy Large m...

Disadvantages of Mixed Economy Large monopolies can still exist in the private sector, and so competition does not really take place There is likely to be a lot of bureaucr

Selling a particular brand of tea, A company is selling a  particular bran...

A company is selling a  particular brand of tea and wishes to introduce a new flavor. How will the company forecast demand for it.

Disadvantages of product differentiation , Disadvantages of product differe...

Disadvantages of product differentiation   a) Product differentiation generally reduces the degree of competition in the market.  It does this in two ways:          i.

Practical importance of knowledge-price elasticity of demand, Practical Imp...

Practical Importance of the knowledge of Price Elasticity of demand The practical importance of the measures of elasticity of demand is to be appreciated in various ways:

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