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प्रश्न
The demand of a commodity, when measured through the expenditure approach, is inelastic. A fall in its price will result in : (choose the correct alternative)
(a) No change in expenditure on it.
(b) Increase in expenditure on it.
(c) Decrease in expenditure on it.
(d) Anyone of the above.
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उत्तर
Decrease in expenditure on it.
Demand for a good is termed inelastic through the expenditure approach when a fall in its price will result in the decrease in expenditure on it. This is because the expenditure is positively related with a price.
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