The price of coffee dropped sharply last month, while the quantity sold remained the same. Each of five people suggests an explanation: A: demand decreased, but supply was perfectly inelastic; B: demand decreased, but it was perfectly inelastic; C: demand decreased, but supply increased at the same time; D: supply increased, but demand was unit elastic; E: supply increased, but demand was perfectly inelastic. a. Draw each graph of demand and supply curves for each explanation of A,B,C,D,E, respectively. b. Whose explanations are correct?
The price of coffee dropped sharply last month, while the quantity sold remained the same. Each of five people suggests an explanation: A: demand decreased, but supply was perfectly inelastic; B: demand decreased, but it was perfectly inelastic; C: demand decreased, but supply increased at the same time; D: supply increased, but demand was unit elastic; E: supply increased, but demand was perfectly inelastic. a. Draw each graph of demand and supply curves for each explanation of A,B,C,D,E, respectively. b. Whose explanations are correct?
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter5: Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 13PAE
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The price of coffee dropped sharply last month, while the quantity sold remained the same. Each of five people suggests an explanation:
A: demand decreased, but supply was perfectly inelastic;
B: demand decreased, but it was perfectly inelastic;
C: demand decreased, but supply increased at the same time;
D: supply increased, but demand was unit elastic;
E: supply increased, but demand was perfectly inelastic.
a. Draw each graph of
b. Whose explanations are correct?
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