If at a given moment, producers cannot change the quantity supplied regardless of price, the momentary supply elasticity is

If at a given moment, producers cannot change the quantity supplied regardless of price, the momentary supply elasticity is

• A. has infinite elasticity.
• B. has unit elasticity.
• C. does not exist.
• D. has zero elasticity.

Answer: (D)

The main idea is how supply responds to changes in price. When producers can’t change the quantity they supply at that moment—no matter what the price does—the quantity supplied is fixed. Elasticity of supply is the percent change in quantity supplied divided by the percent change in price. If quantity doesn’t change at all, the percent change in quantity is zero, so the elasticity is zero. This situation describes perfectly inelastic (or momentary) supply, where price changes don’t lead to any immediate change in quantity. That’s why zero elasticity is the best answer. Infinite elasticity would mean quantity changes dramatically with tiny price moves, which isn’t the case when quantity is fixed. Unit elasticity would require quantity to change by the same percentage as price, which also isn’t happening when quantity is held constant. And the concept does exist in this moment; it isn’t undefined.

The main idea is how supply responds to changes in price. When producers can’t change the quantity they supply at that moment—no matter what the price does—the quantity supplied is fixed. Elasticity of supply is the percent change in quantity supplied divided by the percent change in price. If quantity doesn’t change at all, the percent change in quantity is zero, so the elasticity is zero. This situation describes perfectly inelastic (or momentary) supply, where price changes don’t lead to any immediate change in quantity.

That’s why zero elasticity is the best answer. Infinite elasticity would mean quantity changes dramatically with tiny price moves, which isn’t the case when quantity is fixed. Unit elasticity would require quantity to change by the same percentage as price, which also isn’t happening when quantity is held constant. And the concept does exist in this moment; it isn’t undefined.