"If a product price increases, a family's spending on the product has – InterviewSolution

1.	"If a product price increases, a family's spending on the product has to increase." Defend or refute.
Answer» When a product price increases, expenditure on the commodity will not increase in the situation when e_D > 1 (elasticity of demand is greater than unity). It will increase only in situation when e_D < 1. In a situation when e_D = 1, expenditure will remain constant, even when prices rise.

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