Which one of the following situations would lead to an increase in equilibrium price?
A Demand is perfectly inelastic and a firm’s labour costs fall.
B Demand is perfectly elastic and a firm’s labour costs rise.
C Supply is perfectly elastic and the price of a substitute good falls.
D Demand is perfectly inelastic and a firm’s labour costs rise.
The answer is Demand is perfectly inelastic and a firm’s labour costs rise.
