A given leftward shift in the supply curve of product X will increase equilibrium price to a greater extent, the:
A)more elastic the supply curve
B)larger the elasticity of demand
C)more elastic the demand for the product
D)more inelastic the demand for the product

Question

Quizplus · Accepted Answer

When the demand for a product is more inelastic, it means that consumers are less responsive to changes in price. Therefore, even with a leftward shift in supply (indicating a decrease in the quantity supplied at each price level), the increase in equilibrium price will be greater, as consumers are still willing to pay a higher price for the product despite the decrease in quantity supplied.

A Given Leftward Shift in the Supply Curve of Product