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Question
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
MCQ
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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 price and total expenditure move in the same direction, demand is inelastic. Therefore, price elasticity of demand is less than one.
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