Post Utme Caleb University 2024 Commerce Question 35

Practice objective / multiple choice question 35 from the 2024 Post Utme Caleb University Commerce examination.

Post Utme Caleb University 2024 Commerce Objective / Multiple Choice
Question 35 POST_UTME_CALEB_UNIVERSITY • 2024 • COMMERCE • objective

In a perfectly competitive market, the law of one price dictates that the price of a good is determined by the intersection of the supply and demand curves. However, this is not always the case. Consider a market where the demand curve is inelastic and the supply curve is perfectly inelastic. What is the effect on the equilibrium price and quantity?

Answer Options

A. The equilibrium price and quantity remain unchanged.
Correct Answer B. The equilibrium price increases, but the quantity remains unchanged.
C. The equilibrium price decreases, but the quantity remains unchanged.
D. The equilibrium price and quantity both increase.
Correct Answer
B
Correct Option:
The equilibrium price increases, but the quantity remains unchanged.

About This Question

This is Post Utme Caleb University 2024 Commerce Question 35. It is one of the objective questions from the 2024 Post Utme Caleb University Commerce examination.

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