Urgent help! I got an Exam about economy!Watch
3.If a good has a low price elasticity of demand, then a change in price will lead to a smaller change in demand. So if technological changes lead to a decreased price of the good, then a good with a higher price elasticity of demand will see an increase in demand. If there is a low price elasticity of demand, it is likely that there will be little total spending on the good to increase production. So high price elasticity of demand will lead to a rise in the share of the economies total spending if technology increases, as technology increasing will likely lead to lower prices.
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