If a 20 per cent increase in the price of a good does not change the quantity supplied, the
A) supply is unit elastic.
B) supply is perfectly inelastic.
C) supply is perfectly elastic.
D) supply is elastic.
E) None of the above answers is correct.

Question

Quizplus · Accepted Answer

If a 20 percent increase in price does not change the quantity supplied, it means that the supply is completely unresponsive to changes in price. This is only possible if the supply is perfectly inelastic, meaning that the quantity supplied remains constant regardless of price changes.

If a 20 Per Cent Increase in the Price of a Good