passwella.
Menu

WAEC Economics 1991 (August) Question 30

Question 30

Elasticity

The diagram shows that

Diagram for this question
  1. A.supply is infinitely elastic
  2. B.the higher the price, the greater the quantity supplied
  3. C.the higher the price, the lower the quantity supplied
  4. D.supply has a unitary elasticity
  5. E.demand of labour is completely inelastic.
Show the answer and explanation

Answer: A (supply is infinitely elastic)

Explanation

A horizontal supply curve means any quantity is supplied at price P, but none below it: supply is perfectly (infinitely) elastic.