Below are two supply curves with differing elasticities. First, identify which s

Question

Below are two supply curves with differing elasticities. First, identify which supply curve is perfectly elastic and which is perfectly inelastic. Next, sort the characteristics of each curve into the correct bins. Supply 10 Supply Supply(1) Perfectly Inelastic Perfectly Elastic Quantity supplied Quantity suplied is ihyper -sensilive to changes in price A shift in demand will elicit A shift in demand will not elicit Supply(1) a large response in quantity supplieda change in quantity supplied 0 1 23 45 6 78 9 10 Quantity

Explanation / Answer

Supply curve= Perfectly inelastic, a shift in demand will not elicit a change in quantity supplied, quantity supplied dies not respond to changes in Price.

Supply (1) = Perfectly elastic, a shift in demand will elicit a large response in quantity supplied, quantity supplied is hyper sensitive to Changes in Price.

This is law of Demand and supply and Price Elasticity.

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