A horizontal supply curve indicates an elasticity of supply that equals

A horizontal supply curve indicates an elasticity of supply that equals

• A. infinity
• B. 0
• C. 1
• D. -1

Answer: (A)

Elasticity of supply measures how much quantity supplied responds to price changes. A horizontal supply curve shows perfectly elastic supply: at the given price, producers are willing to supply any amount. Because even a tiny change in price would induce a very large (theoretically unlimited) change in quantity, the elasticity of supply is infinite. The other values correspond to different, incompatible cases—zero elasticity would come from a vertical curve where quantity doesn’t respond to price, unit elasticity from a specific proportional response, and a negative value isn’t typical for the usual upward-sloping supply relation.

Elasticity of supply measures how much quantity supplied responds to price changes. A horizontal supply curve shows perfectly elastic supply: at the given price, producers are willing to supply any amount. Because even a tiny change in price would induce a very large (theoretically unlimited) change in quantity, the elasticity of supply is infinite. The other values correspond to different, incompatible cases—zero elasticity would come from a vertical curve where quantity doesn’t respond to price, unit elasticity from a specific proportional response, and a negative value isn’t typical for the usual upward-sloping supply relation.