Asked by Mandalyns Watters on Jul 09, 2024
Verified
An increase in demand caused no change in the equilibrium price. Thus, supply must be
A) perfectly inelastic.
B) inelastic.
C) elastic.
D) perfectly elastic.
Equilibrium Price
The price at which the quantity of goods supplied equals the quantity of goods demanded, leading to market balance.
Perfectly Elastic
A situation where a small price change results in an infinite change in the quantity demanded or supplied.
Supply
The total amount of a good or service available for purchase at any given price level in a market.
- Attain an understanding of the price elasticity of demand concept and the process by which it is established.
Verified Answer
SS
Samantha Suarez-BurgosJul 15, 2024
Final Answer :
D
Explanation :
When supply is perfectly elastic, it means that suppliers are willing to supply any quantity at a particular price. Therefore, if demand increases and the equilibrium price does not change, it indicates that the supply curve is perfectly elastic, allowing the quantity supplied to increase to meet the higher demand without changing the price.
Learning Objectives
- Attain an understanding of the price elasticity of demand concept and the process by which it is established.