Under which scenario will sellers of a product find it easier to pass cost increases onto consumers?
A) When the demand curve is vertical
B) When the demand curve is downward sloping
C) When the demand curve is horizontal
D) None of the above is correct, as the shape of the demand plays no role in this process.

Question

Quizplus · Accepted Answer

When the demand curve is vertical, it indicates that the quantity demanded does not change with price, meaning consumers are perfectly inelastic to price changes. Sellers can pass on cost increases without reducing the quantity sold.

Under Which Scenario Will Sellers of a Product Find It