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When a decrease in price leads to an increase in total expenditure, what type of elasticity is indicated?
  • a)
    Less than unitary elastic
  • b)
    Greater than unitary elastic
  • c)
    Perfectly inelastic
  • d)
    Unitary elastic
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
When a decrease in price leads to an increase in total expenditure, wh...
If a decrease in price results in an increase in total expenditure, it indicates that demand is greater than unitary elastic. This means that consumers are significantly responsive to price changes, resulting in a larger quantity demanded.
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