Asked by Claudia Gonzalez on Jun 29, 2024
Verified
Compare changes in the equilibrium price and quantity when demand increases in a market with an upward sloping supply curve and in a market with a vertical supply curve.
Equilibrium Price
The rate at which the amount of a product or service that consumers want to buy matches the amount that producers want to sell, achieving equilibrium in the market.
- Comprehend market balance and how it is visually represented on a graph.
Verified Answer
ZK
Zybrea KnightJul 04, 2024
Final Answer :
When a market has an upward sloping supply curve, an increase in demand will cause both the equilibrium price and the equilibrium quantity to rise. When a market has a vertical supply curve, an increase in demand will cause only the equilibrium price to rise; the equilibrium quantity remains the same because the quantity supplied is fixed and cannot adjust.
Learning Objectives
- Comprehend market balance and how it is visually represented on a graph.