Answer to Question #194470 in Microeconomics for salman ahmed

Question

The equilibrium price of coffee mugs rose sharply last month, but the equilibrium quantity was the same as ever. Three people tried to explain the situation. Which explanations could be right? Explain your logic

Answer 1

Supply decreased but demand was inelastic.

Explanation Even though supply declined due to which equilibrium quantity remained same but because demand was inelastic the was no change in demand