If the producers of a product do not respond to price changes at all, then an increase in demand results in
A)no change in price but a large increase in equilibrium quantity.
B)an increase in price but no change in equilibrium quantity.
C)as much an increase in price as in equilibrium quantity.
D)no change in both price and equilibrium quantity.
E)a large increase in price and a large decrease in equilibrium quantity .

Question

Quizplus · Accepted Answer

If producers do not respond to price changes, it means the supply is perfectly inelastic. In this case, an increase in demand would lead to an increase in price, as the quantity cannot change due to the inelastic supply.

If the Producers of a Product Do Not Respond to Price