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A perfectly inelastic supply schedule: a. can be represented by a line parallel to the...

Question:

A perfectly inelastic supply schedule:

a. can be represented by a line parallel to the horizontal axis.

b. cannot be shown on a two-dimensional graph.

c. can be represented by a line parallel to the vertical axis.

d. rises upward and to the right, but has a constant slope.

Supply Schedule:

A supply schedule is a representation of the supply curve. It is a table that shows the different quantities of a good or service that the suppliers are willing to supply to the market at different price levels.

Answer and Explanation:

The correct answer is: c. can be represented by a line parallel to the vertical axis.


We say that supply is inelastic if the price elasticity of supply is equal to zero. That is, when a change in the price of the product does not affect the quantity supplied of the good. In this case, the quantity supplied remains the same at every price level. A perfectly inelastic supply curve is therefore represented by a line parallel to the verticle axis.


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Market Supply Schedule

from Economics 102: Macroeconomics

Chapter 3 / Lesson 2
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