When a price decrease 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 a price decrease produces a decline in the total amount spent on a commodity, demand is said to be price inelastic. This means that the quantity demanded of the good does not significantly change in response to a change in price. Therefore, the total amount spent on the commodity also decreases but by a smaller proportion.

When a Price Decrease Produces a Decline in the Total