If the price elasticity of demand for tofu is 1.7 and the price for a pound of tofu increases by 10%, then total spending on tofu will
A) increase.
B) remain the same.
C) decrease.
D) be zero.

Question

Quizplus · Accepted Answer

Since the price elasticity of demand for tofu is greater than 1 (elastic), a 10% increase in price will lead to a more than proportional decrease in quantity demanded, resulting in a decrease in total spending on tofu.

If the Price Elasticity of Demand for Tofu Is 1