QUESTION 3 10 points Figure Slave Redemption with Perfecty E

QUESTION 3 10 points Figure: Slave Redemption with Perfecty Elastic Supply) Refer to the figure Suppose the supply curve is perfectly elastic as it is in the graph a fise in the demand for slaves (from D1 to D2) causes Figure: Slave Redemption with Perfectly Elastic Supply Price o Denand tonm Quantity ot O A the number of people in slavery to remain at 500 after the redemption program B the price of slaves to remain unchanged è D All of the answers are correct.

Solution

\"C\"

400 additional people will enter slavery temporarily before they are released. As the supply is perfectly elastic the price will not increase and excess demand will be met with increased supply but option 1 is wrong so we can\'t go for \"D\". Option C is the correct answer.