Question on: JAMB Economics - 2018
If a demand curve that intersects a perfectly inelastic supply curve shift is rightward, then____________
A
only the quantity will increase
B
The prices will remain constant
C
the equilibrium price and quantity will increase
D
only the price will increase
Ask EduPadi AI for a detailed answer
Correct Option: C
Here's the breakdown:
* **Perfectly Inelastic Supply:** This means the quantity supplied does not change regardless of price. The supply curve is a vertical line.
* **Rightward Shift in Demand:** This indicates an increase in demand; at any given price, consumers now want to buy more.
* **Intersection:** The point where the demand and supply curves meet determines the equilibrium price and quantity.
* **Effect:** With a perfectly inelastic supply, an increase in demand will only drive up the price. The quantity supplied remains the same because the supply is fixed.
Add your answer
Please share this, thanks!
No responses