Question

If sellers do not adjust their quantities supplied at all in response to a change in price, what can be concluded about the price elasticity of supply?

1) The price elasticity of supply is perfectly inelastic.
2) The price elasticity of supply is perfectly elastic.
3) The price elasticity of supply is unit elastic.
4) The price elasticity of supply cannot be determined.

Answer 1

The price elasticity of supply is perfectly inelastic.

Step-by-step explanation:

If sellers do not adjust their quantities supplied at all in response to a change in price, it can be concluded that the price elasticity of supply is perfectly inelastic. Perfectly inelastic supply means that the quantity supplied does not change at all in response to a change in price. In other words, the price elasticity of supply is zero.