Saved Bookmarks
| 1. |
The demand of a commodity when measured through the expenditure approach is inelastic, result in (choose the correct alternative) :(a) no change in expenditure on it(b) increase in expenditure on it.(c) decrease in expenditure on it(d) any one of the above |
|
Answer» The demand of a commodity, when measured through the expenditure approach, is inelastic. A fall in its price will result in decrease in expenditure on it. Reason : In case of inelastic demand total expenditure shares a positive relationship with price. Therefore, a fall in price leads to a corresponding decline in expenditure. Hence, the correct answer is option (c). |
|