Question

If a fixed quantity of a good is available, and no more can be made, what is the price elasticity of supply?

Short answer

When a fixed quantity of a good is available and no more can be manufactured,the price elasticity of supply is zero. In this, even if the price of the commodity changes, there is no effect on the quantity supplied.

Step-by-step solution

Effect of price elasticity of supply:

Price elasticity of supply is calculated as the percentage change in quantity supplied divided by the percentage change in the price of goods. In price elasticity of supply, it is kept in mind that there is no effect on the other factors.

Price elasticity of supply is calculated as:

$$\begin{gathered} {\mathrm{\pi }}_{\mathrm{s}}=\frac{\%△\mathrm{in}\mathrm{Qty}.\mathrm{Supplied}}{\%△\mathrm{in}\mathrm{Price}} \\ {\mathrm{\pi }}_{\mathrm{s}}=\frac{0}{\%△\mathrm{in}\mathrm{Price}} \\ =0 \end{gathered}$$

Therefore, the Price elasticity of supply is zero. It means that even if the price goes higher, there is no effect on the quantity supplied as it remains fixed.