Multiple Choice
When there is a change in a non-price determinant of supply, which of the following occurs in the supply curve?
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3. The Market Forces of Supply and Demand
Supply and Demand: Quantitative Analysis
Multiple Choice
When artists pass away, the supply of their paintings most likely becomes:
A
Perfectly inelastic
B
More elastic
C
Unit elastic
D
Perfectly elastic
Verified step by step guidance1
Understand the concept of supply elasticity: Supply elasticity measures how much the quantity supplied of a good changes in response to a change in its price.
Consider the nature of the supply of paintings by an artist who has passed away: Since no new paintings can be created after the artist's death, the quantity supplied is fixed and cannot increase regardless of price changes.
Recall the definition of perfectly inelastic supply: It means the quantity supplied remains constant no matter how the price changes, represented by a supply elasticity of zero.
Compare this to other elasticity types: More elastic means quantity supplied changes significantly with price, unit elastic means proportional change, and perfectly elastic means quantity supplied can change infinitely with price.
Conclude that since the supply of paintings cannot increase after the artist's death, the supply curve is vertical, indicating perfectly inelastic supply.
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