If Demand Is Inelastic, an Increase in the Price of a Good

question 89

Multiple Choice

If demand is inelastic, an increase in the price of a good will cause total expenditures on the good to

• A) fall.
• B) remain constant since the decrease in quantity sold is exactly offset by the price increase.
• C) rise.
• D) rise if it is a normal good and fall if it is an inferior good.