If Demand Increases When Supply Is Perfectly Price Elastic, Then

question 16

Multiple Choice

If demand increases when supply is perfectly price elastic, then

• A) consumer surplus will remain the same.
• B) consumer surplus will increase.
• C) it is not possible to predict the change in consumer surplus.
• D) consumer surplus will decrease with the increase in price.

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Definitions:

Correlation

A statistical measure that describes the extent to which two variables change together, but does not necessarily imply causation.

Cause-And-Effect

The principle that an action or event will produce a certain response or effect in the form of another event.

Negative Correlation

A relationship between two variables where one variable increases as the other decreases, and vice versa.

Computer Technology

The use of computers and software to manage information, including the development, maintenance, and use of computer systems, software, and networks for processing and distributing data.