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Questions
With the help of a suitable diagram, explain the following degree of elasticity of supply.
Es = ∞
With the help of a suitable diagram, explain the following degree of elasticity of supply.
Es = α
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Solution
When there is an infinite supply at a particular price, then the supply is said to be perfectly elastic. The supply curve is a horizontal straight line parallel to the x-axis, as shown in the diagram. Quantity supplied can be OM, OQ or ON at the same price as OP.
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