The price of mangoes is currently $5.00 per pound. At this price, producers are supplying 4,000 pounds of mangoes. Point C on th
e graph shows the current equilibrium price and quantity. To which point will the equilibrium shift if the demand increases suddenly because of a non-price determinant of demand?
2 answers:
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Answer: A perfectly inelastic supply curve means that<u><em> the quantity supplied is completely fixed.</em></u>
Perfectly inelastic supply states that supply is completely fixed. Therefore it is not affected by the change in price level.
<u><em>Therefore, the correct option in this case is (e)</em></u>
