Draw three different supply curves on a graph: Make S1 highly elastic Make S2 highly inelastic...

Draw three different supply curves on a graph:

Make S1 highly elastic
Make S2 highly inelastic
Make S3 perfectly inelastic
Which supply curve is the supply curve for Vincent van Gogh’s masterpiece, “A Starry Night”?
Which supply curve is for an ice cream manufacturer?
Which supply Curve if for an airplane manufacturer?

Solutions

Expert Solution

(a+b+c) Supply side elasticity is also called price elasticity of supply. It describes to what extent the quantity supplied of a good is affected by a change in its price.

We have compiled all three supply curves in the one diagram for the clarity of slopes.

(d) The supply curve for Vincent van Gogh’s masterpiece, “A Starry Night” would be S3 i.e. Perfectly inelastic supply since the supply of it is very limited.

(e) The supply curve for an ice cream manufacturer will be S1 i.e. Highly elastic. This means ice cream manufacturer can adjust the quantity of icecream due to change in prices quickly. It costs little to make and supply ice cream in the market.

(f) The supply curve for an airplane manufacturer would be S2 i.e. highly Inelastic. This is because it takes time to produce airplanes as raw material and resources couldnot be gathered quickly. The supply of airplane, therefore will take time to increase.

Rahul Sunny answered 1 month ago

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