When will increase in supply bring down the price, leaving the quantity demanded unchanged?

When demand for the commodity is perfectly inelastic.

The correct answer is Option (2) → When demand for the commodity is perfectly inelastic.

• Perfectly inelastic demand means that the quantity demanded remains constant regardless of any change in price. The demand curve is vertical.

• When supply increases, it leads to a fall in price due to excess supply.

• However, if demand is perfectly inelastic, consumers will continue to buy the same quantity even at the lower price.

  Example: Life-saving medicines like insulin

• Suppose a diabetic patient must take 1 vial of insulin per week, regardless of its price.

• If the price is ₹500 per vial, the patient buys 1 vial per week.

• If the price falls to ₹300 due to an increase in supply, the patient still buys only 1 vial per week, because they need only one and cannot use more, even if it’s cheaper.