Asked by
Brooke Fiore
on Oct 25, 2024
Verified
Suppose the market supply curve is upward sloping and market demand is perfectly inelastic. If the market price is held above the equilibrium level, which of the following statements about the resulting outcome is not true?
A) The decrease in consumer surplus is fully captured by the producers.
B) There will be an excess quantity supplied.
C) Quantity demanded will remain the same.
D) Quantity demanded will decline.
Perfectly Inelastic
Describing a situation where the quantity demanded or supplied does not change regardless of changes in price.
Market Supply
The total quantity of a specific good or service that is available for purchase in the market by all suppliers at various price levels.
Market Demand
The total demand for a product or service across all consumers in a market at a given price level and time.
- Understand the concept of deadweight loss and its causes within the context of market interventions.
- Evaluate the efficiency of market outcomes versus outcomes with government intervention.
Verified Answer
CR
Learning Objectives
- Understand the concept of deadweight loss and its causes within the context of market interventions.
- Evaluate the efficiency of market outcomes versus outcomes with government intervention.