Class 12 Exam  >  Class 12 Questions  >  If the demand for a good is inelastic, an inc... Start Learning for Free
If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to:
  • a)
    Increase
  • b)
    Decrease
  • c)
    Remain the same
  • d)
    Become zero
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
If the demand for a good is inelastic, an increase in its price will c...
The price elasticity of demand for a good and the total expenditure made on the good are greatly related to each other. At times, it becomes important to determine the effect on the expenditure on a good due to change in price of the good.
We know that the price of a good and the demand for the good are inversely related to each other. So, responsiveness of demand in relation to change in price (i.e. price elasticity of demand) determines the change in expenditure.
 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.
View all questions of this test
Explore Courses for Class 12 exam
If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to:a)Increaseb)Decreasec)Remain the samed)Become zeroCorrect answer is option 'A'. Can you explain this answer?
Question Description
If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to:a)Increaseb)Decreasec)Remain the samed)Become zeroCorrect answer is option 'A'. Can you explain this answer? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to:a)Increaseb)Decreasec)Remain the samed)Become zeroCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to:a)Increaseb)Decreasec)Remain the samed)Become zeroCorrect answer is option 'A'. Can you explain this answer?.
Solutions for If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to:a)Increaseb)Decreasec)Remain the samed)Become zeroCorrect answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for Class 12. Download more important topics, notes, lectures and mock test series for Class 12 Exam by signing up for free.
Here you can find the meaning of If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to:a)Increaseb)Decreasec)Remain the samed)Become zeroCorrect answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to:a)Increaseb)Decreasec)Remain the samed)Become zeroCorrect answer is option 'A'. Can you explain this answer?, a detailed solution for If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to:a)Increaseb)Decreasec)Remain the samed)Become zeroCorrect answer is option 'A'. Can you explain this answer? has been provided alongside types of If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to:a)Increaseb)Decreasec)Remain the samed)Become zeroCorrect answer is option 'A'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to:a)Increaseb)Decreasec)Remain the samed)Become zeroCorrect answer is option 'A'. Can you explain this answer? tests, examples and also practice Class 12 tests.
Explore Courses for Class 12 exam
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev