Q4
If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to
A.
Increase
AnswerB.
Decrease
C.
Remain the same
D.
Become zero
Answer: Option A
Solution
Answer: Option A
Solution:
If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to increase. Raising prices will always cause total revenue to increase.