Question

What happens to the total expenditures for a product with elastic demand when its price goes up?

Answer 1

Elasticity is more than One (Ed > 1): When demand is elastic, a fall in the price of a commodity results in increase in total expenditure on it. On the other hand, when price increases, total expenditure decreases. It means, in case of highly elastic demand, price and total expenditure move in the opposite directions.

Step-by-step explanation:

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