A supply curve parallel to the X- axis indicates?

Step 1: Analyze the question We need to know what a supply curve that runs parallel to the X-axis (the horizontal axis, which shows quantity) tells us about price elasticity of supply.

Step 2: Explain the concept Price elasticity of supply (PES) measures how much quantity supplied responds to a change in price:

PES = % change in quantity supplied ÷ % change in price

• Horizontal supply curve (parallel to the X-axis): price stays fixed at one level, but quantity supplied can be any amount. Producers will supply unlimited quantity at that price, and nothing at a price even slightly lower. PES = ∞ (perfectly or infinitely elastic).
• Vertical supply curve (parallel to the Y-axis): quantity is fixed no matter the price. PES = 0 (perfectly inelastic).

Step 3: Solution

• The X-axis shows quantity and the Y-axis shows price.
• A curve parallel to the X-axis is horizontal, so price is constant while quantity changes.
• Any tiny change in price leads to an infinitely large change in quantity supplied, so PES = ∞.

Checking the options:

• A. Fairly elastic: PES greater than 1 but finite. This is a normal upward-sloping curve, not horizontal.
• B. Infinitely elastic: matches the horizontal line.
• C. Fairly inelastic: PES less than 1, a steep curve.
• D. Perfectly inelastic: this is the vertical line, the opposite case.

Answer: B. Infinitely elastic supply

Exam tip: Remember "Horizontal = Huge (infinite) elasticity" and "Vertical = Very stuck (zero elasticity)". The same rule applies to demand curves in the same way.