When there is an increase in demand, the rise in the equilibrium price is greater if supply is price elastic.

Name: When there is an increase in demand, the rise in the equilibrium price is greater if supply is price elastic.
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Question

Quizplus · Accepted Answer

When there is an increase in demand, the rise in the equilibrium price is greater if the supply is price inelastic because suppliers are less able to increase production in response to increased demand, leading to higher prices.

When There Is an Increase in Demand, the Rise in the Equilibrium