question archive The price of apples increases 5 percent, while the price of all other goods (AOG) remains constant
The price of apples increases 5 percent, while the price of all other goods (AOG) remains constant
Subject:EconomicsPrice:2.88 Bought3
The price of apples increases 5 percent, while the price of all other goods (AOG) remains constant. You respond by reducing your consumption of apples by 2.5 percent. Which of the following statements is true?
A. Your demand for apples is inelastic and your total expenditure on apples increases after the price change.
B. Your demand for apples is elastic and your total expenditure on apples increases after the price change.
C. Your demand for apples is inelastic and your total expenditure on apples decreases after the price change.
D. Your demand for apples is elastic and your total expenditure on apples decreases after the price change.
E. We need more information to determine what happens to the expenditure on apples since we do not know what other goods she consumes.
