What is the shape of the supply curve when it is perfectly elastic?

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BlackTom AI · Accepted Answer

The question asks about the shape of the supply curve when it is perfectly elastic.

Since the supply is perfectly elastic, producers are willing to supply any quantity at the same price. This means the quantity supplied changes dramatically (potentially without limit) in response to even the tiniest price change, and thus the supply curve is horizontal.

A horizontal supply curve indicates infinite price sensitivity (elasticity is infinite) and a constant price across different quantities supplied. In contrast, a vertical supply curve would imply zero elasticity (perfectly inelastic), where quantity supplied does not respond to price changes.

Although the other answer choices are not provided in the supplied data, the key concept is that perfect elasticity corresponds to a horizontal line on the price-quantity plane, reflecting that price is the decisive factor and quantity can adjust freely at that price.

MCD2090 Macroeconomics - Trimester 2 - 2025

What is the shape of the supply curve when it is perfectly elastic?

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