If demand is inelastic, an increase in price will cause total expenditure to
A) fall to zero.
B) remain constant.
C) decrease.
D) increase.
E) be negative.

Question

Quizplus · Accepted Answer

When demand is inelastic, consumers are not very responsive to price changes, so an increase in price leads to a smaller percentage decrease in quantity demanded, resulting in an increase in total expenditure.

If Demand Is Inelastic, an Increase in Price Will Cause