If the quantity supplied for a product cannot change when price changes, which statement is true?

If the quantity supplied for a product cannot change when price changes, which statement is true?

• A. Quantity supplied is fixed regardless of price
• B. Demand is perfectly elastic
• C. Costs rise with output
• D. Prices are fixed by policy

Answer: (A)

When quantity supplied does not change as price changes, supply is perfectly inelastic. That means the quantity is fixed regardless of price, and the supply curve would be vertical. This can happen when producers face capacity or regulatory constraints that prevent adjusting output in the short run. Describing demand as perfectly elastic would address buyers’ response to price, not sellers’. Costs rising with output relates to cost structure, not how responsive quantity is to price. Prices fixed by policy would remove price changes altogether, so it doesn’t describe a situation where price changes and quantity still doesn’t respond.

When quantity supplied does not change as price changes, supply is perfectly inelastic. That means the quantity is fixed regardless of price, and the supply curve would be vertical. This can happen when producers face capacity or regulatory constraints that prevent adjusting output in the short run.

Describing demand as perfectly elastic would address buyers’ response to price, not sellers’. Costs rising with output relates to cost structure, not how responsive quantity is to price. Prices fixed by policy would remove price changes altogether, so it doesn’t describe a situation where price changes and quantity still doesn’t respond.