Assume downward sloping demand, but perfectly inelastic supply in both years. Assumption BIG holds. In 2026,...

Assume downward sloping demand, but perfectly inelastic supply in both years. Assumption BIG holds.

In 2026, economists estimate that demand was inelastic at the market price for a normal good. If, in 2027, there was a slight reduction in supply, what is the change from 2026 to 2027?

Group of answer choices

TS decreases. PS decreases.

TS decreases. PS increases.

TS decreases. PS may increase or decrease.

TS increases. PS decreases.

TS increases. PS increases.

TS increases. PS may increase or decrease.

Expert Solution

Rahul Sunny answered 2 years ago

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