[amp_mcq option1=”Zero” option2=”Infinite” option3=”Equal to 1″ option4=”Greater than 0 but less than 1″ correct=”option1″]<\/p>\n
The correct answer is: A. Zero.<\/p>\n
A horizontal supply curve parallel to the quantity axis implies that the elasticity of supply is zero. This means that the quantity supplied is not affected by changes in the price. In other words, producers are willing to supply any quantity of the good at the prevailing price.<\/p>\n
Option B is incorrect because an infinite elasticity of supply would mean that producers are willing to supply an infinite quantity of the good at any price. This is not realistic, as there are always some costs associated with production, and producers would not be willing to produce a good at a loss.<\/p>\n
Option C is incorrect because an elasticity of supply of 1 means that the quantity supplied changes in the same proportion as the price. This is not the case for a horizontal supply curve, where the quantity supplied does not change at all in response to changes in the price.<\/p>\n
Option D is incorrect because a elasticity of supply of greater than 0 but less than 1 means that the quantity supplied changes by less than the proportion of the change in the price. This is not the case for a horizontal supply curve, where the quantity supplied changes by the same proportion as the price.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”Zero” option2=”Infinite” option3=”Equal to 1″ option4=”Greater than 0 but less than 1″ correct=”option1″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-47909","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n