Inelastic Supply Curve and the Demand Curvfe
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Using graph(s) compare the impact on price, quantity and total revenue when:
A) an elastic demand curve increases along a perfectly inelastic supply curve
B) an inelastic demand curve increases along a perfectly inelastic supply curve
NOTE: Assume the increase in demand in both cases are of the same size.
This is just a general tutorial question© BrainMass Inc. brainmass.com March 6, 2023, 10:03 pm ad1c9bdddf
Inelastic means that there is no effect in quantity due to price. There are two slides attached to this answer (please see the first one where the two inital graphs are presented). In the first graph, the supply is perfectly inelastic but the demand is relatively elastic (normal). In the second one, a perfectly inelastic supply curve is matched with a relatively inelastic demand curve (note it didn't say perfectly inelastic-just inelastic - a perfectly inelastic ...
This solution deals with what would happen to price and quantity given an inelastic supply curve. It contrasts the situation given an elastic demand curve and an inelastic demand curve.