If PES equals zero, the supply curve is:

• A. Perfectly inelastic
• B. Inelastic
• C. Unit elastic
• D. Elastic

Answer: (A)

Price elasticity of supply measures how much the quantity supplied changes when the price changes. If the elasticity is zero, there is no change in quantity no matter how much the price moves. That means producers are not responsive to price changes in the given time frame, so the supply curve is vertical. This situation is called perfectly inelastic supply: quantity supplied is fixed despite price changes.

In contrast, a small but nonzero elasticity (inelastic) still means some response, just a limited one; unit elastic means the quantity changes in proportion to price; and elastic means the quantity responds more than proportionally. The key idea with zero elasticity is that price movement cannot induce any adjustment in output.