A shift in supply will have a bigger effect on price than output if demand is ?
Correct answer: D. Price inelastic
- A. income elastic
- B. income inelastic
- C. Price elastic
- D. Price inelastic
Explanation
With price-inelastic demand, buyers change quantity only slightly when price changes, so a supply shift has a larger effect on price than on output. Price-elastic demand would cause a comparatively larger output response.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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