If a demand curve that intersects a perfectly inelastic supply curve shifts rightward, then____________

Analyze the question: The supply curve is perfectly inelastic, so it is a vertical line. Quantity supplied stays fixed no matter what the price is. The demand curve then shifts to the right, meaning demand increases.

Concept: Equilibrium is where demand and supply meet. With a vertical supply curve, the quantity is set by supply alone. Producers cannot produce more, however high the price goes.

Solution:

1. Start with the original equilibrium at price P₁ and quantity Q (fixed by the vertical supply curve).
2. Demand increases, so the demand curve shifts right. It now cuts the same vertical supply line at a higher point.
3. Quantity stays at Q, because supply cannot respond. Buyers compete for the same fixed amount of goods, so the price is bid up to P₂, where P₂ > P₁.

Checking each option:

• A. Only quantity increases: wrong, because quantity is fixed.
• B. Price remains constant: wrong, because price rises.
• C. Both price and quantity increase: wrong, because quantity does not change.
• D. Only the price will increase: correct.

Tip: Remember "vertical supply means quantity is stuck." When supply is perfectly inelastic, any shift in demand changes only the price. When supply is perfectly elastic (horizontal), a demand shift changes only the quantity. Examples of perfectly inelastic supply are a fixed plot of land or a one-off painting.