If supply is perfectly inelastic, the price elasticity of supply is equal to
A) 1.
B) 0.
C) infinity.
D) a negative number between 0 and infinity.

Question

Quizplus · Accepted Answer

If supply is perfectly inelastic, it means that the quantity supplied does not change with a change in price. Therefore, the percentage change in quantity supplied is zero, and the price elasticity of supply (which is defined as the percentage change in quantity supplied divided by the percentage change in price) is zero as well.

If Supply Is Perfectly Inelastic, the Price Elasticity of Supply