Question

A perfectly inelastic supply curve means that … a) a shift in demand will cause the quantity supplied to increase to infinity. b) any change in price will cause the quantity supplied to drop to zero. c) the quantity supplied depends entirely on the location of the demand curve. d) the supply curve is horizontal. e) the quantity supplied is completely fixed.

Answer 1

Answer: A perfectly inelastic supply curve means that the quantity supplied is completely fixed.

Perfectly inelastic supply states that supply is completely fixed. Therefore it is not affected by the change in price level.

Therefore, the correct option in this case is (e)