The supply of aged cheddar cheese is inelastic, and the supply of bread is elast

Question

The supply of aged cheddar cheese is inelastic, and the supply of bread is elastic. Both goods are considered to be normal goods by a majority of consumers. Suppose that a large income tax increase decreases the demand for both goods by 10%.

Refer to the above. Total consumer spending on aged cheddar cheese will

decrease, and total consumer spending on bread will increase.

increase, and total consumer spending on bread will increase.

increase, and total consumer spending on bread will decrease.

decrease, and total consumer spending on bread will decrease.

decrease, and total consumer spending on bread will increase.

increase, and total consumer spending on bread will increase.

increase, and total consumer spending on bread will decrease.

decrease, and total consumer spending on bread will decrease.

Explanation / Answer

increase, and total consumer spending on bread will decrease.

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