Demand for a product is elastic. Its price falls. What will be its effect on total expenditure ? Give example.

Demand for a product is elastic. Its price falls. What will be its eff

1.	Demand for a product is elastic. Its price falls. What will be its effect on total expenditure ? Give example.
Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :Given that demand for <a href="https://interviewquestions.tuteehub.com/tag/theproduct-1410331" style="font-weight:bold;" target="_blank" title="Click to know more about THEPRODUCT">THEPRODUCT</a> is <a href="https://interviewquestions.tuteehub.com/tag/elastic-967540" style="font-weight:bold;" target="_blank" title="Click to know more about ELASTIC">ELASTIC</a> which means that % rise in demand is more than % fall in price . Therefore total expenditure will move in the <a href="https://interviewquestions.tuteehub.com/tag/opposite-1137237" style="font-weight:bold;" target="_blank" title="Click to know more about OPPOSITE">OPPOSITE</a> direction of price change. Since price has <a href="https://interviewquestions.tuteehub.com/tag/reduced-1181337" style="font-weight:bold;" target="_blank" title="Click to know more about REDUCED">REDUCED</a>, total expenditure would rise. For example.<br/> <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/MIC_ECO_U02_C04_S01_029_S01.png" width="80%"/></body></html>