Scenario 5.1
The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P x . Assume that P = $8, I = 200, and P x = $10.
-If the price elasticity of supply is zero, the supply curve is a horizontal line parallel to the quantity axis.

Question

Quizplus · Accepted Answer

A zero price elasticity of supply means the supply curve is vertical, not horizontal, indicating that quantity supplied does not change with price.

Scenario 5.1 The Demand for Noodles Is Given by the Following Equation