Question

Demand for a good is termed inelastic through the expenditure approach when if (choose the correct alternative)

a) Price of good falls, expenditure on it rises

b) Price of the good falls, expenditure in it falls

c) Price of the good falls, expenditure on it remains unchanged

d) Price of the good rises, expenditure in it falls

Answer 1

Price of the good falls, expenditure in it falls

Demand for demand is inelastic through the expenditure approach when the price of the good falls and expenditure also falls.