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Questions
Draw and briefly explain a perfectly elastic supply curve.
With the help of suitable diagrams, explain the Perfectly elastic supply.
Draw and explain the following degree of elasticity of supply.
Ep = 0
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Solution
When the supply of a commodity changes without change in its price, the supply of a commodity changes without change in its price, the supply of the commodity will be called perfectly elastic. The value of price elasticity of supply in this case is infinity, es = α. It is purely an imaginary concept and can only be explained with the help of an imaginary supply schedule as given below.
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