is d right? Refer to the graph hclow. If dcmand incrcased:Quantityprice and quanlily would increase.price and quantity would decrease.price would stay the same and quantity woild decrease.price would slay Lhe sarme ard quanlily would increase.Price

Answered: Refer to the graph hclow. If dcmand…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 17P: If a 10 decrease in the price of one product that you buy causes an 8 increase in quantity demanded...

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is d right?

Refer to the graph hclow. If dcmand incrcased:
Quantity
price and quanlily would increase.
price and quantity would decrease.
price would stay the same and quantity woild decrease.
price would slay Lhe sarme ard quanlily would increase.
Price

Expert Solution

Step 1

Supply curve is horizontal implies supply is perfectly elastic. For any values of quantity demanded, price is constant. So, elasticity of supply is infinity.

Step 2

If quantity demanded rises, demand curve shifts to the right while supply curve remains horizontal. So, equilibrium price remains the same and equilibrium quantity rises.

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