PRC-3 · Chapter 11 · Question 37 of 57
A famous dead artist's masterpiece goes to auction. Because no more can ever be painted, the supply is fixed at one single unit. The supply curve is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) A vertical line (perfectly inelastic)
Explanation
When supply is absolutely fixed and cannot respond to any price changes, the supply curve is vertical, meaning it is perfectly inelastic.
More Elasticity of Demand and Supply MCQs
- Q39When a firm lowers the price of its product, it experiences a massive surge in quantity demanded that completely overwhelms the price cut…
- Q40Which type of goods generally possess a 'more elastic' supply curve because they can be easily stored in warehouses without rotting while…
- Q41If the government imposes a new tax on a good with highly elastic demand, who will bear the majority of the tax burden (incidence)?
- Q42If a 5% increase in price causes absolutely no change in the quantity supplied of a good, the elasticity of supply is:
- Q43Which of the following products is likely to have the lowest price elasticity of demand?