If the supply of Monet paintings is perfectly inelastic, an increase in the demand for them will increase:
A) equilibrium quantity but reduce equilibrium price
B) equilibrium quantity but equilibrium price will be unchanged
C) equilibrium price but equilibrium quantity will be unchanged
D) equilibrium price but reduce equilibrium quantity

Question

Quizplus · Accepted Answer

If the supply is perfectly inelastic, the quantity supplied cannot change in response to a change in demand. Therefore, an increase in demand will lead to an increase in the equilibrium price, but the equilibrium quantity will remain the same.

If the Supply of Monet Paintings Is Perfectly Inelastic, an Increase