The price of coffee fell sharply last month, while the quantity sold remained th

Question

The price of coffee fell sharply last month, while the quantity sold remained the same. Five people suggest various explanations: Charles: Demand decreased, but it was perfectly inelastic. Dina: Demand decreased, but supply was perfectly inelastic. Gilberto: Demand decreased, but supply increased at the same time Juanita: Supply increased, but demand was perfectly inelastic. Lorenzo: Supply increased, but demand was unit elastic. Who could possibly be right? Check all that apply. O Charles Dina Gilberto Juanita Lorenzo

Explanation / Answer

Price changes lead to no change in quantity demand or quantity supply are called perfectly inelastic demand (if there is no change in demand) or perfectly inelastic supply (if there is no change in supply).

So, here "Dina" and " Juanita" could be right.

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