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egoroff_w [7]
3 years ago
6

If the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium pri

ce to:

Business
1 answer:
never [62]3 years ago
8 0

Answer:

If the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to <u>rise and the equilibrium quantity to stay the same</u>.

Explanation:

Perfectly inelastic demand curve indicates the quantity demanded for the life-saving medicine remains the same or does not change in response to a change in price.

Since a part of the law of supply states that the lower the quantity supplied, the higher the price; a reduction in the supply of the life-saving medicine will increase its price.

The combining effect of the two above will lead to an increase in the equilibrium price while the equilibrium quantity will remain the same as it will not respond to the change in price.

The attached graph explains this more clearly. In the graph, the demand curve DD is used to represent the perfectly inelastic demand curve for the life-saving medicine. Therefore, the quantity remains at q no matter the changes, either increase or decrease, in price. Movement from the supply curve S1 to S2 indicates a reduction in supply of the life-saving medicine which causes an increase in the equilibrium price from Po to P1 while the equilibrium quantity stays at q.

This therefore shows that if the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to <u>rise and the equilibrium quantity to stay the same</u>.

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What are welfare payments or consumer studies?
klio [65]
Welfare payments are governments subsidies that provide financial aid to those who cannot care for themselves. Some are meant to be temporary aid like TANF, SNAP, and day care programs. Others like programs for the aged, blind, and disabled may be given for the remainder of their lives. 

Hope this helps.
7 0
3 years ago
Assume that the demand curve for a certain good is a vertical line. This vertical demand curve illustrates the idea that:
ladessa [460]

Answer:

e.people will not change the quantity of the good when the price of the good is changed.

Explanation:

When the demand curve for a good is vertical, it indicates that the demand for the good is perfectly inelastic ; a change in price has no effect on the quantity demanded.

Goods with perfect inelasticity usually have no or little close subsituites.

I hope my answer helps you

6 0
2 years ago
Suppose you've just inherited $10,000 from a relative. You're trying to decide whether to put the $10,000 in a non-interest-bear
Serggg [28]

Answer:

A. $800

B. $1,000

C. a. The quantity of money demanded decreases as the interest rate rises

Explanation:

A. Computation for the opportunity cost of holding the $10,000 as money if Interest Rate is 8%

Opportunity Cost for 8% interest rate=$8%*$10,000

Opportunity Cost for 8% interest rate= $800

Therefore the opportunity cost of holding the $10,000 as money if Interest Rate is 8% will be $800

B. Computation for the opportunity cost of holding the $10,000 as money if Interest Rate is 10%

Opportunity Cost for 10% interest rate =10%*$10,000

Opportunity Cost for 10% interest rate = $1,000

Therefore the opportunity cost of holding the $10,000 as money if Interest Rate is 10% will be $1,000

C. Based on the information given the previous analysis suggest about for money: THE QUANTITY OF MONEY DEMANDED DECREASES AS THE INTEREST RATE RISES.

6 0
3 years ago
QUESTION 1 The country Grupindor recently experienced a drastic increase in inflation. This led to the depreciation in the value
yawa3891 [41]

Answer:

Option d (economy of the country) is the appropriate answer.

Explanation:

  • Along with many other things, the economy of such a given country is regulated by its society, rules, history, as well as geography, and then it develops out of requirement.
  • This example better shows the operational effects of the country's economy although inflation continues threatening the position due to certain external causes and leading to a decrease in present value.

Some other options offered aren't relevant to the situation described. For the aforementioned to be the right answer.

5 0
3 years ago
In the long run a company that produces and sells kayaks incurs total costs of $15,000 when output is 30 kayaks and $20,000 when
den301095 [7]

I am not sure what your other choices are, but this choice is not correct.

Economies of scale deal with marginal costs and NOT total costs. You would always expect TOTAL costs to go up when you produce more of an item, even when you have economies of scale. Economies of scale says that costs go up LESS with each new unit up until a certain point

4 0
3 years ago
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