Suppose demand is perfectly elastic,and the supply of the good in question decreases.As a result,
A)the equilibrium quantity decreases,and the equilibrium price is unchanged.
B)the equilibrium price increases,and the equilibrium quantity is unchanged.
C)the equilibrium quantity and the equilibrium price both are unchanged.
D)buyers' total expenditure on the good is unchanged.

Question

Quizplus · Accepted Answer

When demand is perfectly elastic, any change in supply will only affect the equilibrium quantity, not the price. Therefore, a decrease in supply will lead to a decrease in the equilibrium quantity while the price remains unchanged.

Suppose Demand Is Perfectly Elastic,and the Supply of the Good