When the demand curve shifts,the ____ elastic the supply curve at the initial equilibrium price,the _____ the change in equilibrium price and the ______ the change in equilibrium quantity.
A) more; larger; smaller
B) less; larger; smaller
C) more; larger; larger
D) less; smaller; larger

Question

Quizplus · Accepted Answer

When the demand curve shifts, the less elastic the supply curve at the initial equilibrium price, the larger the change in equilibrium price, and the smaller the change in equilibrium quantity. This is because inelastic supply is less responsive to changes in demand, so the equilibrium price will change more than the equilibrium quantity. Option A is incorrect because a more elastic supply curve would result in a larger change in equilibrium quantity, which is not consistent with the question. Option C is incorrect because a larger change in equilibrium price and quantity would only occur if both supply and demand were more elastic, which is not specified. Option D is incorrect because a smaller change in equilibrium quantity would not occur if the supply curve was more elastic.

When the Demand Curve Shifts,the ____ Elastic the Supply Curve