If the price of a good falls by 10% and the percentage decrease in the total amount consumers spend on the good is 5% then the good is
A)elastic.
B)inelastic.
C)unit elastic.
D)perfectly inelastic.

Question

Quizplus · Accepted Answer

If the total amount consumers spend on a good decreases by a smaller percentage (5%) than the percentage decrease in its price (10%), it indicates that the demand for the good is inelastic. In this case, consumers are still willing to buy almost the same quantity of the good, even at the new lower price. Therefore, the good is inelastic.

If the Price of a Good Falls by 10% and the Percentage