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Price Elasticity of Demand · Question 22 of 62

Question 22

EasyOriginal question

Under the total expenditure method, if the price of a good falls and total spending on it rises, demand is

Options for question 22

Show the answer and explanation
CorrectNot quiteAnswer D

Correct answer: D

Explanation

  1. Spending = price × quantity. If spending rises when price falls, quantity rose by a larger percentage than price fell.

  2. That is elastic demand.

Concept
Total expenditure method: elastic demand
Typical time
40 s
Your time
—
The rule this testsThe total expenditure method
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