When the price of a certain good was higher than it is now, consumers spent a total of $3 billion annually buying the good.
- When the price of a certain good was higher than it is now, consumers spent a total of $3 billion annually buying the good. Then the price decreased and as a result, consumer expenditure on the good (and the producers’ revenue) changed to $5 billion annually. Assuming the levels of all demand shift variables remained constant, what can you tell from this information?
- none of the above, because you don’t know by how much the price decreased.
- only that the quantity demanded increased.
- only that the demand curve is downward-sloping.
- that the quantity demanded increased and that demand for this good is inelastic.
- that the quantity demanded increased and that demand for this good is elastic.
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