If the price of a good rises by 10% and the percentage decrease in the total amount consumers spend on the good is 15% then the good is
A)elastic.
B)inelastic.
C)unit elastic.
D)perfectly inelastic.

Question

Quizplus · Accepted Answer

If the price elasticity of demand is greater than 1, then the good is considered elastic. With a 10% price increase, a 15% decrease in the total amount consumers spend implies a price elasticity of demand greater than 1. Therefore, the good is elastic.

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