ICSE BoardEnglish MediumSTD 10EconomicsTheory of Supply2 Marks
Question
What is meant by perfectly elastic supply?
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Answer
When the supply of a commodity rises or falls without any change in its price, the supply of that commodity is said to be perfectly elastic. The supply curve will be parallel to the x-axis. In such case Es = ∞ If supply is perfectly elastic, it means that any change in price will result infinite change in quantity.
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