When Ellie was younger, she used to buy comic books in a perfectly competitive market, where neither supply nor demand is perfectly elastic or perfectly inelastic. Use this information for all questions with the title “Perfect Comictition”. Assume each question is independent (e.g., whatever happened in prior questions doesn’t apply). (Perfect Comictition) You observe that a large supply increase causes a large change in price but a small change in quantity demanded. What could explain this? When Ellie was younger, she used to buy comic books in a perfectly competitive market, where neither supply nor demand is perfectly elastic or perfectly inelastic. Use this information for all questions with the title “Perfect Comictition”. Assume each question is independent (e.g., whatever happened in prior questions doesn’t apply). (Perfect Comictition) You observe that a large supply increase causes a large change in price but a small change in quantity demanded. What could explain this? Comic expenditure represents a large share of consumer income. Comics are a luxury. Comics have few substitutes. None of the above.
Answer This phenomenon can be explained by the fact that comic expenditure represents a large share of consumer income, making comics a luxury item with few substitutes. Supporting Subsections Comic expenditure represents a large share of consumer income When a