Question

In the small town of Springfield, Duffman observes that the price of beer has fallen. Duffman concludes that the total amount of money spent buying beer has to fall since the price of beer is lower now. Is he correct? Why or why not? Clearly explain your answer.

Answer 1

Answer:

No.

Explanation:

If the price change, so would do the supply and demand for beer.

This can either increase or decrease the amount of money spent buying beer. We don't have a guarantee result.

For example

if previously price was 300 and 3 beer were sold= 300 x 3 = 900

now if the price went to 100 and 50 beer were sold 100 x 50 = 5,000

The money use for the purhcase of beer, increased.