When a good is price inelastic, consumer expenditures on the good

Question

Quizplus · Accepted Answer

When a good is price inelastic, it means that its demand is not very responsive to changes in price. This means that when the price of the good increases, consumers will still buy roughly the same amount of the good, resulting in an increase in consumer expenditures on the good. Conversely, when the price of the good decreases, consumers will still buy roughly the same amount, resulting in a decrease in consumer expenditures on the good. Therefore, choice A is the correct answer.

When a Good Is Price Inelastic, Consumer Expenditures on the Good