Question

Describe the general appearance of a demand or a supply curve with zero elasticity.

Short answer

Regardless of the price, there is no change in the quantity supplied or demanded by a percentage.

Step-by-step solution

Step 1. Definition

The quantity supplied does not respond to price changes when the elasticity is zero, indicating that the good is "fixed" in supply. Such goods sometimes lack a production component or are not manufactured, limiting short-term expansion opportunities.

similarly, when demand elasticity is zero, a change in price would not change quantity demanded. Such goods can be essentials such as life saving medicines.

Step 2. Conclusion

In case of zero elasticity, the demand curve would be a straight line parallel to the y-axis instead of a downward sloping curve. This means, irrespective of the price level, the quantity would remain the same.

In case of a supply curve with zero elasticity, the supply curve would not be an upward sloping curve. Instead, it would be a straight line parallel to the y-axis or the vertical axis. This means even if the price increases, the quantity supplied would be the same.