Answered: Suppose rice is normal, demand is…

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Economics

Suppose rice is normal, demand is elastic and the price of rice rises. What happens to total spending on rice? Explain.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter19: Elasticity

Section: Chapter Questions

Problem 7QP

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Suppose rice is normal, demand is elastic and the price of rice rises. What happens to total spending on rice? Explain.

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Normal goods are those which are consumed in greater quantity(Q) when the income(M) of the consumer goes up. A good's demand(DD) is price-elastic, it implies that the Q of the good increases at a greater proportionate percentage with a percentage increment in the price(P) of that good.

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