Problem (3): If supply is unit elastic and demand is inelastic, a shift in which curve...

Question

Question

Problem (3): If supply is unit elastic and demand is inelastic, a shift in which curve would affect quantity more? Price more?

Answer 1

Answer #1

Shifting the demand curve will have more effect on quantity

Because when demand curve is inelastic shifting thr supply curve will only change price and not quantity.

Shifting the supply curve will have more effect on price.

Because shifting the supply curve will only result in higher price and no change in output. Effect is maximum on price.

Answer 2

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