Can someone provide examples of 1) Perfectly elasticity of supply? 1) Perfectly inelasticity of supply? 1) Perfectly elasticity of demand 1) Perfectly inelasticity of demand I just always get mix up cause of my poor concept
- P. elastic supply = The flow of oil, OPEC can at will decide when they want to cutback oil or when they want to increase production 2) P. inelastic supply = Land in the greater Toronto area, there is only a fixed amount of land in a said amount of area, the demand will determine the price 3) P. elastic demand = If people were indifferent between going to the cinema or renting a movie the demand would be perfectly inelastic. If ticket prices to the cinema rose then people would go out and rent a movie instead and vice versa. That’s why if you face P. elastic demand and increase price, your quantity falls and total revenue falls. 4) P. inelastic demand = Think of smoker’s who can’t quit. Government imposes more taxes on cigarettes, smoker’s are going to pay because they need their fix. So if you increase the price of cigaretts your total revenue increases.