Horizontal Supply Curve Indicates Perfect Elasticity

Steps:

• A supply curve shows quantity supplied at various prices.
• Horizontal line means price stays constant regardless of quantity supplied.
• At that fixed price, the firm supplies any amount without changing price.
• This implies infinite supply at the given price level.

Why A is correct:

• A horizontal supply curve defines perfectly elastic supply, where quantity supplied is infinite at the equilibrium price per economic theory.

Why the others are wrong:

• B: Horizontal curve varies quantity with price fixed, not constant quantity.
• C: Supply is zero below the price, not infinite.
• D: Perfect inelasticity is a vertical curve, not horizontal.

Final answer: A