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:

Public Good

A good or service offered to every member of a community for free, supplied by either governmental bodies or private entities without the intention of making a profit.

Optimal Level

The most efficient, beneficial, or favorable point in a process or activity, often associated with achieving the best outcome or maximum productivity.

Public Good

A good that is non-excludable and non-rivalrous, where one person's enjoyment of the good does not diminish the ability of others to enjoy it, typically provided by the government.

Market Demand Curve

A graphical representation showing the quantity of a good that all consumers in a market are willing to purchase at various prices.