Question

If the demand and the supply curve are both vertical, how can we get the consumer surplus and supplier surplus?

Answer 1

Vertical demand curve means quantity demanded remain same regardless of price.It is termed as perfectly inelastic demand,quan quan demanded remain same even after increase in prices.

Vertical reading of supply curve tells us about perfectly inelastic supply.Here shift in price does not drastically impact consumer demand.

Consumer surplus is the measurement of consumer's benefit. It is the difference between consumers willingness to pay for a product and actual price they pay.

Supplier surplus is the amount that producers benefit by selling at market price that is higher then the least that they would willing to sell.