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

Question

Quizplus · Accepted Answer

If the percentage increase in price is greater than the percentage increase in the quantity demanded (in this case, 10% vs. 0%, as the question only refers to the percentage increase in consumer spending), the good is considered inelastic. Therefore, as the total amount consumers spend on the good increases by only 10% despite a 10% increase in price, the good is inelastic.

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