A leftward shift in the supply curve of product X will increase equilibrium price to a greater extent the
A)more elastic the supply curve.
B)larger the elasticity of demand coefficient.
C)more elastic the demand for the product.
D)more inelastic the demand for the product.

Question

Quizplus · Accepted Answer

A leftward shift in the supply curve indicates a decrease in supply. If the demand for the product is more inelastic, consumers are less responsive to price changes, meaning they will continue to buy the product despite a price increase. This leads to a greater increase in equilibrium price compared to a scenario where demand is more elastic.

A Leftward Shift in the Supply Curve of Product X