Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 5 - Part II - Elasticity and its Application - Questions for Review - Page 108: 8

Answer

Price elasticity of supply = 0

Work Step by Step

If the supply is fixed, the supply is said to be perfectly inelastic and the price elasticity of supply will be equal to 0. A percentage change in price will not result in any changes to the quantity supplied. Price elasticity of supply = percentage change in quantity supplied/ percentage change in price = 0/ any percentage change in price = 0
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