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If demand is inelastic, an increase in the price of a good will cause total expenditures on the good to Group of answer choices fall. remain constant since the decrease in quantity sold is exactly offset
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If demand is inelastic, an increase in the price of a good will cause total expenditures on the good to Group of answer choices fall. remain constant since the decrease in quantity sold is exactly offset by the price increase. rise. rise if it is a normal good and fall if it is an inferior good.

User Beebul
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17 votes
17 votes

Answer:

Rise

Step-by-step explanation:

Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.

Price elasticity of demand = percentage change in quantity demanded / percentage change in price

Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one

If price is increased and demand is inelastic, the fall in quantity demanded would be less than the increase in price. As a result total expenditures would increase

Normal goods are goods that are goods whose demand increases when income increases and falls when income falls

User Shender
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