If the demand curve for a life-saving medicine is perfectly inelastic, a reduction in supply will cause the equilibrium price to:
A)rise and the equilibrium quantity to fall.
B)rise and the equilibrium quantity to stay the same.
C)rise and the equilibrium quantity to rise.
D)stay the same and the equilibrium quantity to fall.
E)fall and the equilibrium quantity to stay the same.

Question

Quizplus · Accepted Answer

When demand is perfectly inelastic, quantity demanded does not change with price changes. Therefore, a reduction in supply will increase the price, but the quantity will remain unchanged.

If the Demand Curve for a Life-Saving Medicine Is Perfectly