Answer to Question #179087 in Microeconomics for Tayyaba

Question

If supply of art picture of ancient times decreases due to the shortage of artist 

in a shorter period of time what happened to art market if consumer has 

relatively elastic demand preferences for the art picture of ancient times but 

the supply is relatively inelastic. (support your answer with the help of 

graph).  Need answer urgent

Answer 1

Solution:

A relative elastic demand refers to a demand when the proportionate change produced in demand is higher than the proportionate change in price of a product. In other words, the percentage change in quantity demanded is greater than the percentage change in price. The quantity demanded for the art picture of ancient times by the customers will change much more than the price of the product in the art market.

A relative inelastic supply means that relatively large changes in price cause relatively small changes in quantity. As such, quantity is not very responsive to price. The percentage change in quantity is less than the percentage change in price. Therefore, the quantity of art picture of ancient times supplied will not be affected by the relatively large changes in their prices in the art market. The art market will still receive the same or slightly the same quantity of art picture of ancient times regardless of high prices.

 

The art market for art pictures of ancient times is depicted by the below graph: