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If the Elasticity of Demand for Dry Cleaning Is -0

Question 59

Multiple Choice

If the elasticity of demand for dry cleaning is -0.85 in the range between $3 and $2 per item, how will total consumer expenditures on dry cleaning be affected when dry cleaners lower prices from $3 to $2?


A) Total consumer expenditures will increase.
B) Total consumer expenditures will decrease.
C) Total consumer expenditures will remain unchanged.
D) We cannot determine what will happen to total consumer expenditures unless we also know something about the dry cleaners' costs.

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