A vertical supply curve is said to be ___________________________.
A vertical supply curve is said to be perfectly inelastic.
A vertical supply curve is said to be perfectly inelastic.
To understand why, it's important to know what a supply curve represents. A supply curve shows the relationship between the quantity of a good or service that suppliers are willing and able to sell at different price levels.
When a supply curve is perfectly inelastic, it means that the quantity supplied does not respond to changes in price. In other words, regardless of how prices change, suppliers are unable or unwilling to increase or decrease the quantity they supply.
To determine if a supply curve is perfectly inelastic, we can look at its slope. A vertical supply curve has a slope of infinity, which means that even a tiny change in price will not lead to any change in the quantity supplied.
This situation can occur in certain scenarios. For example, if a good or service has a fixed supply, such as a rare art piece or a limited edition product, the quantity supplied may not change regardless of price. Additionally, when there are regulatory restrictions or legal limitations on production, the supply may be perfectly inelastic.
In summary, a vertical supply curve is said to be perfectly inelastic because it represents a situation where the quantity supplied remains constant regardless of changes in price.