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Assume that the demand for a certain good is perfectly inelastic, and the supply curve of the good is upward sloping. Which of the following occurs in the market for the good if the price of an input used to produce the good increases? A) Increase in quantity demanded B) Decrease in quantity supplied C) No change in quantity demanded or supplied D) Increase in both quantity demanded and supplied

User MaddEye
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If the demand for a good is perfectly inelastic and the supply curve is upward sloping, an increase in the price of an input used to produce the good will result in a decrease in quantity supplied.

This is because the supply curve is upward sloping, meaning that as input prices increase, producers are less willing to supply the good at each price level.

However, since the demand for the good is perfectly inelastic, there will be no change in quantity demanded. This is because a perfectly inelastic demand means that consumers are not responsive to changes in price.

As a result, the equilibrium quantity for the good will decrease, while the equilibrium price may remain the same or increase, depending on the elasticity of demand.

Learn more about Supply and Demand

User Steve Miskiewicz
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