If electric rates were increased by 10 percent because of increased prices of fuel oil and natural gas, and the quantity demanded did not change, one could conclude that, in the short run, the demand for electricity is

Question

Quizplus · Accepted Answer

When the quantity demanded of a good does not change even if the price of the good increases, it implies that the good has a perfectly inelastic demand. In this case, even though the electric rates increased by 10 percent, there was no change in the quantity demanded, suggesting that the demand for electricity is perfectly inelastic in the short run.

If Electric Rates Were Increased by 10 Percent Because of Increased