If demand is highly elastic, and price of the good increases, the total expenditure will .

reduce

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

remain constant

No worries! We‘ve got your back. Try BYJU‘S free classes today!

become zero

No worries! We‘ve got your back. Try BYJU‘S free classes today!

increase

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is A reduce
When demand is elastic, price and total expenditure move in opposite directions. This is because the quantity effect is greater than the price effect.

Suggest Corrections

Similar questions

Suppose the price elasticity of demand for a good is −0.2. How will the expenditure on the good be affected if there is a 10% increase in its price?

If a 7% increase in the price of good-X causes a 7% increase in the expenditure on good-X, then the price elasticity of demand = 1.

If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to _____.

Join BYJU'S Learning Program