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An increase in a good’s price reduces the total amount consumers spend on the good if the _________ elasticity of demand is _________ than one. a. income; less b. income; greater c. price; less d. price; greater

Chapter 5, Problem 2

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QUESTION:

An increase in a good’s price reduces the total amount consumers spend on the good if the _________ elasticity of demand is _________ than one.

a. income; less

b. income; greater

c. price; less

d. price; greater

Questions & Answers

QUESTION:

An increase in a good’s price reduces the total amount consumers spend on the good if the _________ elasticity of demand is _________ than one.

a. income; less

b. income; greater

c. price; less

d. price; greater

ANSWER:

Step 1 of 2

Price elasticity of demand: The price elasticity of demand shows the responsiveness of change in the quantity due to changes in the price of the goods and services at a given period. The three types of price elasticity are elastic demand, inelastic demand, and unitary elastic demand.

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