shantejahtierr1406 shantejahtierr1406
  • 21-01-2020
  • Business
contestada

When supply is perfectly elastic, the value of the price elasticity of supply is?a. 0. b. 1. c. greater than 0 and less than 1. d. infinity

Respuesta :

Dryomys Dryomys
  • 22-01-2020

Answer:

Option (d) is correct.

Explanation:

Price elasticity of supply refers to the responsiveness of quantity supplied with any change in the price level.

But in case of perfectly elastic supply, the price of the products remains the same and increased demand can be met with the same price level.

Hence, the price elasticity of supply in a condition of perfectly elastic supply is infinity.

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