question archive If the price elasticity of supply for pineapple is zero, then what does this mean for pineapple? How will the price for pineapple be set in the market?
Subject:EconomicsPrice:2.88 Bought3
If the price elasticity of supply for pineapple is zero, then what does this mean for pineapple? How will the price for pineapple be set in the market?
If the PES is zero, it is perfectly inelastic, which means that the quantity supplied is the same at all prices. That is, the quantity supplied does not respond to changes in price. This situation occurs where there is a fixed supply that can't be increased or decreased. When this situation arises, price is driven entirely by demand. Specifically, the price is determined where the demand curve intersects with the supply curve because, at that price, consumers will demand the fixed level of supply.