Suppose the demand curve for hybrid cars shifts to the right. This will cause a relatively small increase in the price of hybrid cars if demand is inelastic and supply is perfectly inelastic both demand and supply are inelastic demand is elastic and supply is inelastic both demand and supply are elastic
Added by Pamela T.
Close
Step 1
In other words, consumers are willing to pay higher prices for hybrid cars without significantly reducing their quantity demanded. Secondly, if supply is perfectly inelastic, it means that the quantity of hybrid cars supplied by manufacturers does not change at Show more…
Show all steps
Your feedback will help us improve your experience
Aarya B and 51 other Microeconomics educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
Both friends agree that the demand and supply for hybrid cars will increase. For each of the following situations, determine whether the demand curve or the supply curve increases by dragging the item to the appropriate category. a. The government gives consumers a subsidy to buy hybrid cars. b. More automobile producers start producing hybrids. c. The price of non-hybrid cars falls. d. The price of batteries for hybrid cars rises. e. Gasoline prices rise.
Andrew D.
Inelastic demand exists when a small percentage decrease in price produces a smaller percentage increase in quantity demanded. the quantity demanded remains the same regardless of any changes in marketing strategies. the price is governed by outsides entities but the demand remains high due to these restrictions that make the product exclusive. a small percentage increase in price produces a larger percentage increase in quantity demanded. an increase in price is impossible due to government restrictions.
Jennifer S.
Recommended Textbooks
Principles of Economics
Principles of Microeconomics for AP® Courses
Economics
Transcript
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD