QuestionMay 25, 2025

If the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to: rise and the equilibrium quantity to fall. rise and the equilibrium quantity to stay the same. rise and the equilibrium quantity to rise. stay the same and the equilibrium quantity to fall.

If the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to: rise and the equilibrium quantity to fall. rise and the equilibrium quantity to stay the same. rise and the equilibrium quantity to rise. stay the same and the equilibrium quantity to fall.
If the demand curve for a life-saving medicine is perfectly
inelastic, then a reduction in supply will cause the
equilibrium price to:
rise and the equilibrium quantity to fall.
rise and the equilibrium quantity to stay the same.
rise and the equilibrium quantity to rise.
stay the same and the equilibrium quantity to fall.

Solution
4.7(358 votes)

Answer

rise and the equilibrium quantity to stay the same. Explanation 1. Understand Perfectly Inelastic Demand Perfectly inelastic demand means quantity demanded does not change with price changes. 2. Analyze Supply Reduction Impact A reduction in supply leads to a higher equilibrium price because the same quantity is demanded regardless of price. 3. Determine Equilibrium Quantity Change Since demand is perfectly inelastic, equilibrium quantity remains unchanged despite supply reduction.

Explanation

1. Understand Perfectly Inelastic Demand<br /> Perfectly inelastic demand means quantity demanded does not change with price changes.<br /><br />2. Analyze Supply Reduction Impact<br /> A reduction in supply leads to a higher equilibrium price because the same quantity is demanded regardless of price.<br /><br />3. Determine Equilibrium Quantity Change<br /> Since demand is perfectly inelastic, equilibrium quantity remains unchanged despite supply reduction.
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