Suppose that the supply of oil to Pittsburgh, Pennsylvania is perfectly elastic. If more people move to Pittsburgh because of its great football and hockey teams, what happens to the equilibrium price and quantity of oil in Pittsburgh?
A) Both the equilibrium price and the quantity increase.
B) The equilibrium price increases, but the equilibrium quantity is unchanged.
C) The equilibrium quantity increases, but the equilibrium price is unchanged.
D) Both the equilibrium price and the quantity are unchanged.
Correct Answer:
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