1) Say that equilibrium price remained constant and quantity fell. What would yo
ID: 1097848 • Letter: 1
Question
1) Say that equilibrium price remained constant and quantity fell. What would you say was the most likely cause?
There was (Click to select)an increase, a decrease, no change in demand and (Click to select)an increase,a decrease,no change in supply.
2) For each of the following assume that the supply curve shifts while the demand curve remains constant. What is the direction of the supply shift and relative elasticity of demand?
a. Price remains nearly constant. Quantity decreases enormously.
Demand is (Click to select)highly elastic, perfectly inelastic, perfectly elastic,highly inelastic and supply shifts (Click to select)out, in.
b. Price rises enormously. Quantity does not change.
Demand is (Click to select)perfectly elastic,perfectly inelastic, highly inelastic,highly elastic and supply shifts (Click to select)in,out.
c. Price remains nearly constant. Quantity increases enormously.
Demand is (Click to select)perfectly elastic,highly inelastic,highly elastic,perfectly inelastic and supply shifts (Click to select)out,in.
Explanation / Answer
1)
The most likely cause could perfectly elastic supply curve and a decrease in the demand. Thus the quantity fell because of no change in supply and a decrease in demand.
2)
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