Suppose the supply of product X is perfectly inelastic.If there is an increase in the demand for this product,equilibrium price:

A) will decrease but equilibrium quantity will increase.
B) and quantity will both decrease.
C) will increase,but equilibrium quantity will decline.
D) will increase,but equilibrium quantity will be unchanged.

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amber miller · Accepted Answer

Final Answer : D, Explanation :  Since the supply of product X is perfectly inelastic, a change in demand will lead to a proportionate change in price but no change in quantity supplied. Therefore, the equilibrium price will increase with an increase in demand, but the equilibrium quantity supplied will remain unchanged.

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