If the price of a commodity and total expenditure on that commodity change in the same direction, the price elasticity of demand will be ______. - Economics

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If the price of a commodity and total expenditure on that commodity change in the same direction, the price elasticity of demand will be ______.

Options

  • Greater than one

  • Less than one

  • Equal to zero

  • Equal to infinity

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Solution

If the price of a commodity and total expenditure on that commodity change in the same direction, the price elasticity of demand will be Less than one.

Explanation:

When demand is inelastic, there is a direct relationship between price and total consumer expenditure; thus, demand elasticity is less than one.

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2022-2023 (March) Official

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