Question

Explain the difference between inelastic supply and perfectly inelastic supply

Answer 1

Answer:

PES < 1: Supply is inelastic. PES = 0: The supply curve is vertical; there is no response of demand to prices. Supply is “perfectly inelastic.” PES = ∞ (i.e., infinity): The supply curve is horizontal; there is extreme change in demand in response to very small change in prices