Manuel: Demand decreased, but it was perfectly inelastic.
Poornima: Demand decreased, but supply was perfectly inelastic.
Shen: Demand decreased, but supply increased at the same time.
Valerie: Supply increased, but demand was perfectly inelastic.
Antonio:Supply increased, but demand was unit elastic.
Who could possibly be right? Check all that apply.
Answer:
Poornima, Shen, and Valerie could all possibly be right.
Step-by-step explanation:
The price of fell but the quantity remained the same.
If an elastic demand shifts the demand curve will move to the left. This would cause both prices as well as quantity to decline. Hence, Manuel's statement is wrong
This can be because of the inelastic supply curve. If the supply curve is an inelastic vertical line then a fall in demand will not affect quantity while the price will fall. Hence, Poornima's statement can be correct
If there is a decline in the demand curve will shift to the left. Now, if there is an increase in the supply by the same amount the price will fall but quantity will remain the same. Hence, Shen's statement is correct.
If supply increased but the demand curve is perfectly inelastic, the rightward shift in the supply curve will cause the price to fall but quantity will remain the same. So, Valerie's statement is correct.
if the demand curve is unitary elastic, an increase in supply will cause the price to fall and quantity to increase. So, Antonio's statement is wrong