If the Producers of a Product Do Not Respond to Price

question 21

Multiple Choice

If the producers of a product do not respond to price changes at all, then an increase in demand results in

• A)no change in price but a large increase in equilibrium quantity.
• B)an increase in price but no change in equilibrium quantity.
• C)as much an increase in price as in equilibrium quantity.
• D)no change in both price and equilibrium quantity.
• E)a large increase in price and a large decrease in equilibrium quantity .

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Definitions:

Coefficient

A numerical or constant quantity placed before and multiplying the variable in an algebraic expression.

Inelastic

Describing a situation where the demand for a good or service is relatively unaffected by changes in its price.

Essential Consumption

The purchase and use of goods and services that are considered necessary for basic living and well-being.

Marginal Utility

The additional satisfaction or utility that a consumer gains from consuming one more unit of a good or service.