Figure 6-5
-In Figure 6-5, if price falls from point A to point B along the unit-elastic demand curve,
A)total expenditure remains unchanged.
B)total expenditure increases.
C)total expenditure decreases.
D)total expenditure first increases and then declines.

Question

Figure 6-5 
-In Figure 6-5, if price falls from point A to point B along the unit-elastic demand curve,
A)total expenditure remains unchanged. 
B)total expenditure increases. 
C)total expenditure decreases. 
D)total expenditure first increases and then declines.

Quizplus · Accepted Answer

When the price falls along the unit-elastic demand curve, the quantity demanded increases proportionally to the decrease in price, resulting in a constant total expenditure. Therefore, choice A is correct.

Figure 6-5 -In Figure 6-5, If Price Falls from Point a to Point