Question: A decrease in supply will cause the smallest increase in price when both supply and demand are inelastic. demand is elastic and supply is

A decrease in supply will cause the smallest increase in price when both supply and demand are inelastic. demand is elastic and supply is inelastic. both supply and demand are elastic. demand is inelastic and supply is elastic.

Step by Step Solution

★★★★★

3.38 Rating (148 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

When demand is elastic and supply is inelastic a decrease in supply will lea... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

A decrease in supply will lead to an increase in the price, which decreases demand, thereby lowering price. Thus, a decrease in supply has no effect on the price of a good. Evaluate this statement.

Which of the following events will cause the smallest change in the real exchange rate? a. a 3% increase in E b. a 6% fall in E and a 6% reduction in P* c. a 2% increase in E and a 2% increase in P...

1. A decrease in supply is depicted by a A. movement from point x topoint y . B. shift from S 2 to S 1 . C. shift from S 1 to S 2 . D. movement from point y topoint x . 2. Using the same graph above,...

Question 2 (1 point) _u Relative to the initial equilibrium, when demand increases and supply decreases, there will be O an indeterminant change in price and a decrease in quantity. 0 an increase in...

Movie tickets is a normal good, in the market for movie tickets, a decrease in income will cause the Select one: a. demand curvefor movie tickets to shift left b. quantity demanded for movie tickets...

Movie tickets is a normal good in the market for movie tickets, a decrease in income will cause the: select one: A. demand curve for movie tickets to shift left B. demand curve for movie tickets to...

#16 The graphs show the unit cost curves of a representative rm in a constant cost industry and the market supply and demand curves when there are currently 100 rms in the industry. Unit Cost Curves...

1. Most economists believe that the source of European high unemployment in the past two decades is A) labor market institutions. B) tight monetary policy. C) tight fiscal policy. D) financial...

This is intermediate macroeconomic questions STATE WHETHER TRUE OR FALSE 1. The main difference between the Keynesian sticky wage model and the Classical model is that the nominal wage rate is...

In May 2019, South Koreas two major airlinesKorean Airlines and Asiana Airlines Inc.were hit by foreign exchange losses arising from the weakness of the Korean won against the U.S. dollar. Korean Air...

True or false: The A-Horizon is the first horizon to develop out of the parent material

Troy (single) purchased a home in Hopkinton, Massachusetts, on January 1, 2007, for $215,000. He sold the home on January 1, 2023, for $242,900. How much gain must Troy recognize on his home sale in...

6. Assume the following HFC corporate bond trades on the GSE has a face value of GH1000 Bond HFC 9s29 Current yield ? Volume 500 Close 10512 Net change -14 a. How much does this bond pay every six...

Propose THREE upgrading solutions for the HQ (minimum FIVE floors). Your proposal MUST be based on upgrading the existing HQ network infrastructure you have discussed above. Provide detail...

How could you use social media such as the company's Facebook page, its official blog, and the blogs and pages of individual departments and employees to collect information that would potentially be...

. As one of the Botho students, who has done standard costing as one of the topics in the Cost Accounting module, you have been invited to come and table a discussion on possible causes of variances...

Arctic Cat sold Seneca Motor Sports a shipment of snowmobiles that have a fair market value of $38,400. Seneca paid for the snowmobiles on January 1, 2021, with delivery to occur subsequently. Unless...

Convert the numeral to a HinduArabic numeral. A94 12

On average, television news reporters are better looking than newspaper reporters. Explain why this might be the case, relying on the discussion in Section 17.4 regarding wage differences.

The federal government bans the use of food stamps to buy cigarettes, alcohol or prepared foods such as deli sandwiches and restaurant entrees. Should a similar ban be implemented against the...

In Figure, how will the profit realized by raising the price and reducing the entry fee be affected if Donalds demand curve is only slightly greater than Marthas (instead of twice as large, as shown...

Suppose that the Cobb-Douglas production function is q = L0.75K0.25. a. What is the average product of labor, holding capital fixed? b. What is the marginal product of labor? c. What are the APL and...

What is the elasticity of substitution, , of the CES production function q = (aL + bK ) d/ ?

Max chooses between water and all other goods. If he spends all his money on water, he can buy 12,000 gallons per week. At current prices, his optimal bundle is e1. Show in a diagram. During a...