Question

why price remain unchanged when supply curve is perfectly elastic and demand curve shifts

Answer 1

perfectly elastic is indicated by horizontal straight line supply curve. supply is infinite at the existing price .it means that the suppliers are ready to sell any quantity at the existing price. in such a situation if demand curve shifts to the right (implying increase in demand )or to the left ( immplying decrease in demand)there is a proportionate change in the quantity supply .
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