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- Subject
- Marketeconomics-mcqs › market
- Published
- 31 May 2019
- Last updated
- 28 May 2026
When a demand curve shifts, under which condition will the change in price be more significant than the change in quantity?
Multiple choice question for Market. Select an option, then review the explanation below.
Explanation
When supply is perfectly elastic (elasticity equals infinity), suppliers are willing to provide any quantity at a fixed price. Therefore, a shift in demand will primarily affect the quantity rather than the price. Conversely, if supply elasticity is infinite, price changes are more pronounced than quantity changes because supply cannot adjust quantity. Hence, the price effect dominates when supply elasticity is infinite.
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