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If an industry experiences a shock to supply of minus 10%, demand constant, when the elasticity of demand is -0.5 and the elasticity of supply
If an industry experiences a "shock to supply" of minus 10%, demand constant, when the elasticity of demand is -0.5 and the elasticity of supply is 0.5, we would expect
a. equilibrium price to fall by 10% and supply to rise by 10%.
b. equilibrium price to fall by 10% and supply to rise by 5%.
c. equilibrium price to rise by 10% and supply to rise by 10%
d. equilibrium price to rise by 10% and supply to fall by 5%
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