Not only do changes in demand induce relatively wide fluctuations in price when supply is inelastic,but changes in supply induce relatively wide fluctuations in price when demand is inelastic.

Question

Quizplus · Accepted Answer

When supply is inelastic, the quantity supplied cannot quickly respond to changes in demand, resulting in wide fluctuations in price when demand changes. Similarly, when demand is inelastic, changes in supply can result in wide fluctuations in price because the quantity demanded remains relatively constant despite changes in supply.

Not Only Do Changes in Demand Induce Relatively Wide Fluctuations