A product has a price elasticity of demand of –0.6. The supplier aims to sell off all excess stock of a product and cuts the price of a good by 50%. What effect will this price change have on the quantity purchased and the expenditure on the good?
- Aquantity demanded rises by 30%; expenditure falls
- Bquantity demanded rises by 30%; expenditure rises
- Cquantity demanded rises by 60%; expenditure falls
- Dquantity demanded rises by 60%; expenditure rises