Billoo currently spends Rs. 200 per month on long-distance telephone calls. If the telephone company decides to reduce the rate from Rs. 10 a minute to Rs. 5 a minute, then

A. Whether she spends more or less than Rs. 200 per month depends on whether long-distance telephone calls are a normal good or an inferior good

B. She will spend less than Rs. 200 per month on long-distance telephone call as the new price is an effective price floor

C. Whether she spends more or less than Rs. 200 per month on long-distance telephone calls depends on whether her demand is elastic or inelastic

D. She will spend more than Rs. 200 per month on long-distance telephone calls as her demand has shifted out

Answer: Option C