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CSEET · Economic and Business Environment · Basics of Demand and Supply and Forms of Market Competition

What is the elasticity of supply for a vertical supply curve, such as a fixed number of seats in a stadium?

The elasticity of supply is zero. With a vertical supply curve, quantity supplied stays fixed regardless of price, so the percentage change in quantity is nil and supply is perfectly inelastic, as with a fixed number of stadium seats.

  1. AZeroCorrect
  2. BOne
  3. CGreater than one
  4. DInfinity

Explanation

A vertical supply curve means quantity supplied does not change whatever the price, so the percentage change in quantity is zero. Elasticity is therefore zero, and supply is perfectly inelastic. Infinity applies to a horizontal supply curve.

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