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If demand for a product is​ inelastic, then an increase in price will lead to a...

If demand for a product is​ inelastic, then an increase in price will lead to a decrease in total expenditure .

If demand for a product is​ elastic, then an increase in price will lead to a decrease in total expenditure

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I didn't know what you wanted in the answer. I hope i have provided you with the answer . You can ask for help in comments.

If demand for a product is​ inelastic, then an increase in price will lead to a decrease in total expenditure .THe statement is false .Inelastic demand means the quantity dmanded of the product is not affected as much as the chnage in price . SO the price and total expenditure will move in the same direction . If the price increases , the total expenditure will also increase and vice versa .This is because the quantity demanded will not as much as the price is increases .

If demand for a product is​ elastic, then an increase in price will lead to a decrease in total expenditure.This statment is also false .Total expenditure changes in the opposite direction of price, in case of elastic demand . THis is because the chnage in quantity is greater than the change in price . IF the price rises , the total expenditure will fall due to a greater decrease in quantity demanded and vice - versa.

Rahul Sunny answered 1 year ago
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