When will a decrease in supply cause the smallest increase in price
A)when both supply and demand are inelastic
B)when demand is elastic and supply is inelastic
C)when both supply and demand are elastic
D)when demand is inelastic and supply is elastic

Question

Quizplus · Accepted Answer

When both supply and demand are elastic, a decrease in supply will cause a smaller increase in price because both consumers and producers can adjust their quantities more easily in response to price changes.

When Will a Decrease in Supply Cause the Smallest Increase