Suppose the demand curve for medical care services is perfectly inelastic.What will happen to the equilibrium price and quantity if supply increases?
A)Price and quantity will rise.
B)Price will stay the same and quantity will rise.
C)Price and quantity will fall.
D)Price will fall and quantity will increase.
E)Price will fall and quantity will stay the same.

Question

Quizplus · Accepted Answer

When demand is perfectly inelastic, quantity demanded does not change with price changes. Therefore, if supply increases, the equilibrium price will fall, but the quantity will remain the same.

Suppose the Demand Curve for Medical Care Services Is Perfectly