A vertical supply curve for a product indicates

A vertical supply curve for a product indicates

• A. The amount available in the market is fixed
• B. Prices are fixed by policy
• C. Demand is perfectly elastic
• D. Costs rise with output

Answer: (A)

A vertical supply curve means quantity supplied does not change as price changes. This shows the producer’s ability to change output is fixed in the period considered—capacity or resources limit how much can be produced. So the amount available in the market is fixed, regardless of price changes. The other ideas don’t fit this shape: price controls aren’t indicated by a vertical supply, a perfectly elastic demand would be shown by a horizontal demand curve, and costs rising with output would typically produce an upward-sloping (not vertical) supply curve.

A vertical supply curve means quantity supplied does not change as price changes. This shows the producer’s ability to change output is fixed in the period considered—capacity or resources limit how much can be produced. So the amount available in the market is fixed, regardless of price changes.

The other ideas don’t fit this shape: price controls aren’t indicated by a vertical supply, a perfectly elastic demand would be shown by a horizontal demand curve, and costs rising with output would typically produce an upward-sloping (not vertical) supply curve.