Figure: Slave Redemption with Perfectly Elastic Supply Refer to the figure. Assume the graph illustrates the Sudanese slave trade. If the supply curve is perfectly elastic as it is in the graph, a rise in the demand for slaves (from D₁ to D₂) causes: A) the number of people in slavery to fall to zero after the redemption program. B) the price of slaves to remain unchanged. C) 900 additional people to enter slavery temporarily before they are released. D) the supply of slaves in Sudan to decrease.

Question

Quizplus · Accepted Answer

A perfectly elastic supply curve means that any increase in demand will not result in an increase in the price of the good. Therefore, the price of slaves will remain unchanged despite the increase in demand. The redemption program may lead to the release of some slaves, but it will not reduce the number of people in slavery to zero. Additionally, there is no indication that the supply of slaves in Sudan will decrease. Option C is also incorrect as it suggests that the rise in demand for slaves will cause more people to enter slavery, which does not make sense.

Figure: Slave Redemption with Perfectly Elastic Supply Refer to the Figure