Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
It decreases
B
It increases
C
It stays the same
D
It fluctuates wildly
Understanding the Answer
Let's break down why this is correct
Answer
When the price of a necessity like bread increases and the demand for it is inelastic, total consumer spending on bread actually goes up. Inelastic demand means that people will continue to buy almost the same amount of bread even if the price rises because they need it for their daily lives. For example, if a loaf of bread costs $2 and someone buys five loaves, their total spending is $10. If the price rises to $3 and they still buy five loaves, their total spending increases to $15. This shows that even though the price went up, people are spending more overall because they still need to buy the same amount of bread.
Detailed Explanation
When the price goes up and demand is inelastic, people still buy bread. Other options are incorrect because Some might think that spending goes down when prices rise; It's a common mistake to think spending stays the same.
Key Concepts
Price Elasticity of Demand
Consumer Spending
Market Behavior
Topic
Consumer Spending and Price Elasticity
Difficulty
easy level question
Cognitive Level
understand
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