Food stamps programs serve only to drive food prices higher, not increase the quantity of food available to the poor.â? What would the elasticity of supply have to be for this statement to be true? What would the elasticity of supply have to be for a food stamp program to increase the availability of food to the poor with no prices increase?
Recall that price elasticity of supply is bounded by 0 and positive infinity, with 0 being perfectly inelastic and infinity being perfectly elastic. A perfectly inelastic supply curve is vertical and would satisfy the ...
This solution clearly assesses price elasticity of supply.