A vertical supply curve indicates an elasticity of supply that equals

A vertical supply curve indicates an elasticity of supply that equals

• A. infinity
• B. 1
• C. -1
• D. 0

Answer: (D)

Elasticity of supply measures how much the quantity supplied responds to price changes. A vertical supply curve means quantity supplied does not change at all when price changes. Using the elasticity formula—percent change in quantity supplied divided by percent change in price—the numerator is zero (no change in quantity), so the elasticity is 0. This is called perfectly inelastic supply. In contrast, a horizontal curve would imply infinite (perfectly elastic) supply, and negative values don’t apply here since supply moves upward with price rather than decreasing.

Elasticity of supply measures how much the quantity supplied responds to price changes. A vertical supply curve means quantity supplied does not change at all when price changes. Using the elasticity formula—percent change in quantity supplied divided by percent change in price—the numerator is zero (no change in quantity), so the elasticity is 0. This is called perfectly inelastic supply. In contrast, a horizontal curve would imply infinite (perfectly elastic) supply, and negative values don’t apply here since supply moves upward with price rather than decreasing.