Question

If a fisherman must sell all of his daily catch before it spoils for whatever price he is offered, once the fish are caught, the fishermanâs price elasticity of supply for fresh fish is
a. zero

b. one.

c. infinite.

d. unable to be determined from this information.

e. two.

Answer 1

Answer:

Zero

Explanation:

Supply is buyers ability & willingness to sell at given price, period of time.

Elasticity of Supply is change in supply by buyers, in response to price change.

Supply Elasticity is as undermentioned in following cases :-

• Zero (Perfectly Inelastic) - Quantity supplied doesn't change with price change.
• Inelastic - Quantity supplied change <  price change.
• Elastic - Quantity supplied change > price change
• Infinite (Perfectly Elastic) - Quantity supplied responds infinitely high to price change, prices stay constant.

Given : Fishermen must sell all his daily catch before it spoils; means he will have to sell daily produce irrespective of any price change (rise / fall). So, the elasticity of supply is zero.