When an increase in price produces a decline in the total amount spent on a commodity,demand is said to be
A) of absolute elasticity.
B) income inelastic.
C) of unitary elasticity.
D) price inelastic.
E) price elastic.

Question

Quizplus · Accepted Answer

When an increase in price leads to a decline in the total amount spent on a commodity, it indicates that the quantity demanded decreases by a proportion greater than the increase in price, which is a characteristic of price elastic demand.

When an Increase in Price Produces a Decline in the Total