Asked by
Tsotetsi Teboho
on Oct 26, 2024
Verified
The price elasticity of demand for cabbage has been estimated to be 0.25.If an insect infestation destroys 20% of the nation's cabbage crop (and thus reduces supply) ,how will that affect total expenditures on cabbage,all other things equal?
A) Total expenditures will rise.
B) Total expenditures will fall.
C) Total expenditures will remain unchanged.
D) The information is insufficient to answer the question.
Price Elasticity
A measure in economics that shows how the quantity demanded of a good or service responds to a change in its price.
Total Expenditures
The sum of all spending by consumers, businesses, and the government in an economy.
- Observe the relationship between price movement and overall fiscal performance, especially in the scenario of elasticity.
- Learn about the consequences of supply adjustments on the equilibrium state of the market and cumulative spending.
Verified Answer
NS
Learning Objectives
- Observe the relationship between price movement and overall fiscal performance, especially in the scenario of elasticity.
- Learn about the consequences of supply adjustments on the equilibrium state of the market and cumulative spending.
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