Figure 6-3
-In Figure 6-3(b), as price falls from $15 to $6, total expenditure
A)falls.
B)increases.
C)remains constant.
D)first falls and then increases.

Question

Figure 6-3 
-In Figure 6-3(b), as price falls from $15 to $6, total expenditure
A)falls. 
B)increases. 
C)remains constant. 
D)first falls and then increases.

Quizplus · Accepted Answer

When price falls and total expenditure increases, it indicates that the demand for the product is elastic. This means the percentage increase in quantity demanded is greater than the percentage decrease in price, leading to an increase in total expenditure.

Figure 6-3 -In Figure 6-3(b), as Price Falls from $15 to $6