If the supply of tin is very inelastic and its demand shifts up and down repeatedly along the supply curve, how will the magnitude of changes in quantity compare to the magnitude of changes in price in this market?

Multiple choice question for Trade Policies For the Developing Nations. Select an option, then review the explanation below.

Explanation

When supply is highly inelastic, quantity supplied changes very little in response to price variations. Therefore, cyclical shifts in demand will cause relatively larger fluctuations in price than in quantity, meaning quantity changes are smaller than price changes.

Practice related questions from the same subject.

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4.Which concept explains how nations advance technologically by emulating the development paths of more advanced countries?
5.Why might developing nations that focus their production on agricultural goods or raw materials experience a long-term decline in their terms of trade on the global market?

If the supply of tin is very inelastic and its demand shifts up and down repeatedly along the supply curve, how will the magnitude of changes in quantity compare to the magnitude of changes in price in this market?

Explanation

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