Elasticity of Supply when Supply is Perfectly Inelastic

When supply is perfectly inelastic, it means that the quantity of a good or service supplied remains constant, regardless of changes in its price. In other words, the supply curve is a vertical line. Under such circumstances, the elasticity of supply is zero or, in other words, perfectly inelastic.

Explanation

Elasticity of supply is a measure of the responsiveness of the quantity of a good or service supplied to changes in its price. It is calculated as the percentage change in quantity supplied divided by the percentage change in price. When supply is perfectly inelastic, the quantity supplied remains constant, regardless of changes in its price. Therefore, the percentage change in quantity supplied is zero, and the elasticity of supply is equal to:

Elasticity of Supply = (% Change in Quantity Supplied) / (% Change in Price)
Elasticity of Supply = (0) / (% Change in Price)
Elasticity of Supply = 0 / 1
Elasticity of Supply = 0

Therefore, when supply is perfectly inelastic, the elasticity of supply is equal to zero. This means that there is no change in the quantity supplied in response to changes in price, and the supply curve is a vertical line.

Conclusion

In conclusion, when supply is perfectly inelastic, the elasticity of supply is equal to zero. This indicates that there is no change in the quantity supplied in response to changes in price, and the supply curve is a vertical line.