![]() ![]() Because a perfectly inelastic supply is unaffected by price its supply curve is vertical It is shown as Supply SR on the graph below. Increasing the supply of rental housing overnight is virtually impossible, so the immediate supply curve is perfectly inelastic. Assume town commissioners pass regulations that generate a huge increase in the demand for rental housing. The supply of rental housing is a good example. Over time management can invest in the labor and equipment to increase production, or lay off workers and find other uses for their plant and equipment If prices fall. Time provides greater elasticity in the production of almost all goods and services. Production of some goods or services cannot be increased in the very short term. In most cases, time has a great influence on the elasticity of supply. There is only one Mona Lisa painting, and it cannot be duplicated at any price.īecause the Mona Lisa is unique, it will always have a perfectly inelastic supply. The Mona Lisa painting by Leonardo da Vinci has a perfectly inelastic supply curve. View FREE Lessons! Definition of Perfectly Inelastic Supply:Ī product has a perfectly inelastic supply when the quantity supplied is the same regardless of price.
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