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Question
An increase in the price of a commodity when demand is inelastic, causes the total expenditure of the consumers of the commodity to _______.
An increase in the price of a commodity when demand is inelastic, causes the total expenditure of the consumers of the commodity to _______.
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Solution
The correct option is C increase
An
increase in the price of a commodity when demand is inelastic, causes
the total expenditure of the consumers of the commodity to increase because when the demand is inelastic the quantity demand remains same but as the price increases the total expeniture also rises as total expenditure is measured by multiplying price and quantity demanded.
An increase in the price of a commodity when demand is inelastic, causes the total expenditure of the consumers of the commodity to increase because when the demand is inelastic the quantity demand remains same but as the price increases the total expeniture also rises as total expenditure is measured by multiplying price and quantity demanded.
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