We appreciate your visit to An increase in the price of flash drives leads to an increase in total expenditures on the flash drives Which of the following is true. This page offers clear insights and highlights the essential aspects of the topic. Our goal is to provide a helpful and engaging learning experience. Explore the content and find the answers you need!
Answer :
Final answer:
The answer is C.The demand for flash drives is inelastic.
Explanation:
The correct answer is c. The demand for flash drives is inelastic.
When the price of flash drives increases and the total expenditures on flash drives also increase, it indicates that the demand for flash drives is inelastic. Inelastic demand means that the quantity demanded is not very responsive to changes in price. In this case, even though the price of flash drives increases, consumers are still willing to purchase them at higher prices, resulting in an increase in total expenditures.
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Answer:
The correct answer is letter "C": The demand for flash drives is inelastic.
Explanation:
Elasticity refers to the characteristics of goods or services that change the quantity demanded as a result of price fluctuations. Demand elasticity is determined by dividing the percentage change in quantity demanded by the percentage change in price. If the result is lower than one (1) the demand is inelastic implying changes in price do not change the quantity demanded of the good or service.
In the example, if the increase in the price of flash drives increases the expenditures on flash drives means that people are using more resources of their income to spend it on flash drives, thus, the quantity demanded for flash drives has remained the same or almost the same in front of the raise of prices. Therefore, the demand for flash drives is inelastic.
