In perfectly elastic supply, the supply curve is horizontal. Let me explain why in a simple and understandable way.
The supply curve represents the relationship between the quantity of a product that producers are willing to supply and the price of that product. It shows how the quantity supplied changes in response to changes in price.
In the case of perfectly elastic supply, it means that the quantity supplied can adjust instantly and infinitely in response to any change in price. Producers are able to supply as much of the product as demanded at a specific price, without any constraints or limitations.
When the supply curve is horizontal, it indicates that the quantity supplied remains the same regardless of changes in price. In other words, producers are willing to supply an unlimited quantity of the product at a given price. This suggests a perfectly elastic response to price changes.
For example, let's consider a market for a specific type of smartphone charging cable. If the supply of these cables is perfectly elastic, it means that regardless of the price, producers can supply any quantity of charging cables to meet the demand. Whether the price is high or low, the quantity supplied remains constant. This is represented by a horizontal supply curve.
In contrast, a vertical supply curve would indicate perfectly inelastic supply. This means that the quantity supplied remains constant regardless of changes in price. In this case, producers are unable or unwilling to adjust the quantity supplied in response to price changes.
Therefore, in perfectly elastic supply, the supply curve is horizontal, reflecting the unlimited quantity that producers are willing and able to supply at any given price.