Question

State and explain the elasticity of supply when a straight line supply curve is parallel to the Y-axis.

Answer 1

Perfectly inelastic supply is another extreme example of supply elasticity, where no supply response occurs regardless of how much the price changes.

In this instance, a change in price has no effect on the amount of a commodity delivered. There is no price elasticity. Such a supply curve is depicted in Fig. by supply curve S₂. This supply curve, which is parallel to the Y-axis, demonstrates that regardless of price, the quantity provided of a commodity stays out of quantity (OQ). The elasticity of supply is zero in this instance.