Question

When with a minute change or without any change in price, supply may change to any extent, then the supply is _____________.

• A. perfectly elastic
• B. perfectly inelastic
• C. unitary elastic
• D. more elastic

Answer 1

Answer: (A)

perfectly elastic

it means that any decrease in the product price would immediately cause the supply to shift to zero.
Algebraically, it means that the elasticity of a good or service (the percentage change of quantity / the percentage change of price) equals to infinity.