If the price falls and the total amount consumers spend on the good falls, then demand must be
A)elastic.
B)inelastic.
C)perfectly inelastic.
D)perfectly elastic

Question

Quizplus · Accepted Answer

If the price falls and the total amount consumers spend on the good falls, then demand must be inelastic. Inelastic demand means that the change in price has a relatively small effect on the quantity demanded. Therefore, when the price falls, the decrease in revenue from the lower price is greater than the increase in revenue from the additional sales that result from the lower price, leading to a decrease in the total amount consumers spend on the good.

If the Price Falls and the Total Amount Consumers Spend