If the supply curve for housing is perfectly inelastic, a reduction in demand will cause the equilibrium price to:
A)rise and the equilibrium quantity to fall.
B)rise and the equilibrium quantity to stay the same.
C)fall and the equilibrium quantity to fall.
D)fall and the equilibrium quantity to stay the same.

Question

If the supply curve for housing is perfectly inelastic, a reduction in demand will cause the equilibrium price to:
A)​rise and the equilibrium quantity to fall.
B)​rise and the equilibrium quantity to stay the same.
C)​fall and the equilibrium quantity to fall.
D)​fall and the equilibrium quantity to stay the same.

Quizplus · Accepted Answer

If the supply curve for housing is perfectly inelastic, it means that the quantity of housing supplied does not change in response to changes in price. Therefore, if there is a reduction in demand, the equilibrium price will fall, but the equilibrium quantity will not change since the quantity supplied remains the same.

If the Supply Curve for Housing Is Perfectly Inelastic, a Reduction