Suppose the supply of product X is perfectly inelastic. If there is an increase in the demand for this product, equilibrium price

Respuesta :

Answer:

The equilibrium price increases.

Explanation:

Perfectly inelastic demand implies that the quantity supplied does not changes with a change in the price of the product. The supply curve in this case is a vertical line at the point of equilibrium quantity.

An increase in the demand for the product causes the demand curve to shift to the right. This rightward shift in the demand curve causes the price level to increase.