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Chapter 5: Q.13 (page 130)

Describe the general appearance of a demand or a supply curve with zero elasticity.

Short Answer

Expert verified

A demand or supply curve with zero elasticity is vertical in shape.

Step by step solution

01

Step 1. Introduction:

Zero elasticity is also referred to as perfect inelasticity. It is a situation in which a percentage variation in price, irrespective of size, leads to a zero variation in quantity.

02

Step 2. Explanation:

As the amount of quantity demanded or supplied remains the same irrespective of the prevailing price level, a demand or supply curve with zero elasticity is vertical in shape. The shape of demand and supply curves with zero elasticity is illustrated in the figure below:

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Most popular questions from this chapter

Suppose the cross-price elasticity of apples with respect to the price of oranges is 0.4, and the price of oranges falls by 3%. What will happen to the demand for apples?

What is the relationship between price elasticity and position on the demand curve? For example, as you move up the demand curve to higher prices and lower quantities, what happens to the measured elasticity? How would you explain that?

The equation for a supply curve is 4P = Q. What is the elasticity of supply as price rises from 3 to 4? What is the elasticity of supply as the price rises from 7 to 8? Would you expect these answers to be the same?

The equation for a demand curve is P = 48 – 3Q. What is the elasticity in moving from a quantity of 5 to a quantity of 6?

Because the demand curve for oil is _______ elastic in the long run, OPEC’s reduction in the supply of oil had a ________ impact on the price in the long run than it did in the short run.

a. less; smaller

b. less; lager

c. more; smaller

d. more; larger
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