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Perfectly Inelastic Supply

This refers to when only one quantity of a good can be supplied at any given price. As a result this means the price elasticity of supply (PES) value is equal to 0.

The shape of a perfectly inelastic supply curve is shown below:

The supply curve is vertical at the specific quantity supplied of Qs. This curve highlights that any change in price does not cause a change in the quantity supplied. It is very rare for firms to face an inelastic supply curve as traditionally firms will always supply more when the price of the good they are supplying increases. An example of this might be the UK property market as demand has been outstripping demand, forcing house prices up. This is particularly the case in areas such as London where it is almost impossible to find new land to build properties. Which is an explanation over why house prices are so much expensive in this area. 

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