Question

Draw diagrams to illustrate the price elasticity of supply as equal to zero.

Answer 1

• S₁ is a vertical supply curve.
• It shows that quantity supplied (OQ) remains unchanged, regardless of the price level.
• This means that even if price rises or falls, producers cannot increase or decrease supply.
• Therefore, the price elasticity of supply is zero because there is no responsiveness in supply to changes in price.