For a Given Decrease in Supply, the Condition of Demand

question 95

Multiple Choice

For a given decrease in supply, the condition of demand that will result in the most significant change in price is when demand is

• A)elastic.
• B)inelastic.
• C)perfectly elastic.
• D)perfectly inelastic.

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Definitions:

Price Controls

Government-imposed limits on the prices that can be charged for goods and services in a market, to control inflation or ensure affordability.

Politically Expedient

Actions or decisions taken primarily for political advantage, often to gain popularity or satisfy a particular group, despite potential long-term disadvantages.

Regulations

Rules or directives made and maintained by an authority to regulate behavior or enforce standards.

Black Market Transaction

Illicit trade activities that occur outside authorized legal channels, often involving prohibited goods or services.