Advertisements
Advertisements
Question
If the demand is elastic, what will be the effect of a fall in price on consumer's total outlay?
Very Short Answer
Advertisements
Solution
Total expenditure rises: If demand is elastic, a fall in price will lead to an increase in consumer's total expenditure. This is because the percentage increase in quantity demanded is greater than the percentage decrease in price.
shaalaa.com
Is there an error in this question or solution?
