A decrease in supply will increase prices least when demand is
A)elastic.
B)unit elastic.
C)inelastic (but not perfectly inelastic).
D)perfectly inelastic.

Name: A decrease in supply will increase prices least when demand is A)elastic. B)unit elastic. C)inelastic (but not perfectly inelastic). D)perfectly inelastic.
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Question

Quizplus · Accepted Answer

When demand is elastic, consumers are more responsive to price changes, so a decrease in supply will lead to a smaller increase in price compared to when demand is inelastic.

A Decrease in Supply Will Increase Prices Least When Demand