A Decrease in Supply Will Cause the Smallest Increase in Price

question 33

Multiple Choice

A decrease in supply will cause the smallest increase in price when

• A)both supply and demand are inelastic.
• B)demand is elastic and supply is inelastic.
• C)both supply and demand are elastic.
• D)demand is inelastic and supply is elastic.

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Definitions:

Compounded Quarterly

Interest calculation method where interest is added to the principal sum so that each quarter's interest earns interest in subsequent quarters.

Obligation

A legal or moral duty to do something or pay an amount to someone.

Compounded Monthly

Interest calculation method where the interest is added to the principal at the end of each month, resulting in "interest on interest".

Interest

The cost of borrowing money, typically expressed as an annual percentage rate.