When the demand for a commodity decreases and its supply is vertical we can conclude that:

Question

Quizplus · Accepted Answer

When the demand for a commodity decreases and its supply is vertical, it means that the supply is fixed and cannot vary with changes in demand. Therefore, any change in demand will lead to a change in price only. As demand decreases, the equilibrium point moves down the supply curve, which results in a decrease in price. However, since the supply curve is vertical, the quantity supplied remains constant, and there is no change in the quantity of the commodity sold. Hence, the correct answer is B, price will fall while quantity remains constant.

When the Demand for a Commodity Decreases and Its Supply