The quantity of coffee sold rose sharply last month, while the price remained the same. five people suggest various explanations: andrew: demand increased, but supply increased at the same time. beth: demand increased, but supply was perfectly elastic. darnell: demand increased, but supply was perfectly inelastic. eleanor: supply increased, but demand was perfectly elastic. jacques: supply increased, but demand was unit elastic. who could possibly be right? check all that apply. andrew beth darnell eleanor jacques

Andrew (depends on the magnitude shifts)

Beth

Eleanor

Explanation:

Andrew could be right but depends on the magnitude change in demand and supply. If both (supply and demand) change in the same proportion, the equilibrium quantity will increase and the price could remained the same. But i repeat it depends on the magnitude shifts. Beth is right, a perfectly elastic supply is a horizontal line that is parallel to the x-axis (quantity), then if the demand increases (shifts to the right) then the price will remain the same but the equilibirum quantity will increase. Darnell is wrong because a perfectly inelastic supply is a vertical line parallel to the y-axis, then if the demand increases the eq. quantity will remain the same and the price will increase. Eleanor is right, a perfectly elastic demand is equal to a perfectly elastic supply, a horizontal line parallel to the x-axis, then if supply increases the eq. quantity will increase and the price will remain the same. And Jacques is wrong because unit elastic demand have an elasticity of -1, then this is not a horizontal line parallel to the x-axis, is a curve with a slope of -1, then if the supply increases the price will decrease and the eq.quantity will increase.  

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