Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

Chapter 5 - Part II - Elasticity and its Application - Quick Check Multiple Choice - Page 108: 6

Answer

c

Work Step by Step

Explanation by the first 3rd and 5th person leads to the stated outcome. First person: leads to the conclusion that whenever supply is perfectly inelastic, any increase in demand will only lead to raise in price while quantity sold will remain unchanged. Third Person: when demand increases and supply decreases, however in same magnitude, then price of goods raises while there is no change in quantity sold. Fifth Person: When demand is perfectly inelastic, any decrease in supply will only raise the price while quantity sold will remain unchanged.
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