If a 20 percent increase in the price of a good does not change the quantity supplied,the
A) supply is perfectly inelastic.
B) supply is unit elastic.
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 result in any change in the quantity supplied, it means that the supply is not responsive to changes in price. This is the definition of perfectly inelastic supply.

If a 20 Percent Increase in the Price of a Good