If the supply curve of a good shifts increases and decreases cyclically along a relatively Inelastic (or steep) demand curve, then, in this market, the size of price fluctuations will Be __________ than the size of the quantity fluctuations.

Question

Quizplus · Accepted Answer

Since the demand curve is relatively inelastic (or steep), small changes in quantity demanded will result in large changes in price. Therefore, if the supply curve is shifting cyclically, the size of price fluctuations will be relatively greater than the size of quantity fluctuations.

If the Supply Curve of a Good Shifts Increases and Decreases