Re: About elasticity

In article <nfWdnUKHuulOZL_ZRVn-jg@xxxxxxxxxxx>, nospam
<nospam@xxxxxxxxxxx> wrote:

laura_pretty05@xxxxxxxxxxxx wrote:

I want to ask that " what does it mean for the supply curve to be
perfectly inelastic? And how does revenue change as the demand curve
shifts? " Can anyone tell me in details? Thank you!

If the prices offered for a product increase, more producers want to
enter on that market therefore the quantity increase. How much quantity
increase for an increase in price it is called price elasticity of
supply.

The above definition is incorrect. The price elasticity of supply
is the PROPORTIONATE increase in the quantity supplied for an unit
PROPORTIONATE increase in price. Note that elasticity is a
dimension-less number.

For the supply curve to be perfect inelastic that mean that even if you
are
willing to pay ten times for a product, the quantity of that product
won't
increase.

That is, a perfectly inelastic supply curve is one in which a constant
quantity is supplied whatever the price. Consider quantity as the
X axis and price as the Y axis. Then a perfectly inelastic supply
curve is a vertical line.

As the demand curve shifts, the equlibrium point will move along
the supply curve. Isn't revenue, summed over all firms in the
market, the product of price and the quantity sold? Given a point on
the supply curve, can you identify that product with the area of a
rectangle in the space described above?

--
Mostly economics: <http://www.dreamscape.com/rvien/#PublicationsForFun>
r c
v s a Whether strength of body or of mind, or wisdom, or
i m p virtue, are found in proportion to the power or wealth
e a e of a man is a question fit perhaps to be discussed by
n e . slaves in the hearing of their masters, but highly
@ r c m unbecoming to reasonable and free men in search of
d o the truth. -- Rousseau
.

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