Author Question: If the demand curve is perfectly inelastic, then an increase in supply will: a. increase both the ... (Read 100 times)

K@ · **on:** Jun 30, 2018

If the demand curve is perfectly inelastic, then an increase in supply will:
a. increase both the price and the quantity exchanged.
b. increase the price but result in no change in the quantity exchanged.
c. increase the quantity exchanged but result in no change in the price.
d. decrease the price but result in no change in the quantity exchanged.

Question 2

Even though the use of checks lower transaction costs when compared to the use of paper currency, it is unlikely that the use of paper or metallic currency will disappear entirely. Why?

vish98 · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

d

Answer to Question 2

In small transactions, the gains in safety and convenience of checks are outweighed by the time and cost required to write and process them; in these cases, transaction costs are lower with paper and metallic currency. Therefore, it is unlikely that the use of paper or metallic currency will disappear entirely.