If the price of a good falls by 10% and the percentage increase 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

When the price of a good falls by 10%, the quantity demanded for the good increases because of the law of demand. If the total amount consumers spend on the good increases by 15%, it means that the percentage increase in quantity demanded is greater than the percentage decrease in price. This indicates that the demand for the good is elastic. Hence, the correct answer is (A) elastic.

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