If the demand for some good fluctuates,but supply is constant,then which of the following combinations would generally yield the greatest quantity fluctuations?
A)large demand fluctuations and inelastic supply
B)small demand fluctuations and unit elastic supply
C)small demand fluctuations and elastic supply
D)large demand fluctuations and elastic supply
E)small demand fluctuations and inelastic supply

Question

Quizplus · Accepted Answer

If demand fluctuations are large and supply is elastic, then the quantity fluctuations will be the greatest. This is because when demand changes, a relatively large change in quantity supplied can occur due to the greater responsiveness of supply to changes in price. In contrast, with a constant supply and a small demand shift, the quantity supplied will remain the same, resulting in small quantity fluctuations. The elasticity of supply also plays a role, as a more elastic supply curve will generally result in larger quantity fluctuations in response to changes in demand.

If the Demand for Some Good Fluctuates,but Supply Is Constant,then