Supply of a product is perfectly price-inelastic. Its demand 'decreases'. This leads to fall in real national income. Other things remaining unchange.

Question

Supply of a product is perfectly price-inelastic. Its demand 'decreases'. This leads to fall in real national income. Other things remaining unchange.

Supply of a product is perfectly price-inelastic. Its demand 'decreases'. This leads to fall in real national income. Other things remaining unchange. True or False ? Explain

Monjur Alahi

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2025-01-04 04:42

1 Answers

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Salim Ahmed Kawsar · Accepted Answer · 2023-02-05T15:29:48+06:00

Salim Ahmed Kawsar

Real national income measures GDP in real terms or only in terms of goods and services and not the prices. When the supply is perfectly inelastic, with a fall in demand only the price level will not the quantity demanded or supplied in the economy. Hence the given statement is false.

5 views Answered 2023-02-05 15:29