PRC-3 · Chapter 11 · Question 51 of 57
If an increase in the price of cooking oil causes total consumer expenditure on cooking oil to rapidly increase, this indicates that the demand for cooking oil is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Inelastic
Explanation
When price rises and total revenue/expenditure also rises, it shows consumers did not significantly cut back their consumption, proving demand is inelastic.
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