Suppose at the going wage rate of $20 per hour, firms can hire as many hours of janitorial services as they desire.If any firm tries to lower the wage rate to $19, it will not be able to hire any janitor.What does this indicate about the supply curve for janitorial services?
A)Supply is unit-elastic.
B)Supply is perfectly elastic.
C)Supply is perfectly inelastic.
D)Supply is relatively inelastic.

Question

Quizplus · Accepted Answer

The supply curve is perfectly elastic because any attempt to lower the wage rate results in the inability to hire any janitors, indicating that the supply is infinitely responsive to price changes at the going wage rate.

Suppose at the Going Wage Rate of $20 Per Hour