Question 27
MediumOriginal questionA demand schedule is given.
| Price (₹) | Quantity demanded |
|---|---|
| 10 | 20 |
| 8 | 30 |
| 6 | 40 |
| 4 | 60 |
| 2 | 100 |
By the total expenditure method, what is demand like when the price falls from ₹4 to ₹2?
Show the answer and explanation
CorrectNot quiteAnswer A
Correct answer: A
Explanation
Spending at ₹4 = ₹240; at ₹2 = 2 × 100 = ₹200.
Price falls and spending falls too: inelastic.
Worth noting
A big rise in quantity is not enough: what matters is whether spending rose or fell.
- Concept
- Inelastic demand from spending
- Typical timeTypical
- 70 s
- Your timeYours
- —
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