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What happens to total expenditure when demand is less than unitary elastic?
  • a)
    Total expenditure remains constant
  • b)
    Total expenditure decreases when price increases
  • c)
    Total expenditure increases when price decreases
  • d)
    Total expenditure increases regardless of price changes
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
What happens to total expenditure when demand is less than unitary ela...
When demand is less than unitary elastic, total expenditure decreases when the price increases. This is because the percentage change in quantity demanded is smaller than the percentage change in price, leading to a reduction in overall revenue.
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