Suppose a rise of 8 percent in the price of bison meat in Saskatchewan reduces the consumption of bison meat by 24 percent. Such a price rise will induce consumers to spend
A)more of their income on bison.
B)the same amount of their income on bison as before.
C)less of their income on bison.
D)more on products that are complements of bison.
E)zero dollars on bison meat.

Question

Quizplus · Accepted Answer

When the price of bison meat increases by 8%, the consumption of bison meat drops by 24%. This shows that bison meat is elastic, as the change in price caused a greater percentage change in quantity demanded. Therefore, consumers will reduce the amount they spend on bison meat, indicating that they will spend less of their income on bison.

Suppose a Rise of 8 Percent in the Price of Bison