ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In case of inelastic Demand, when the price is increased, it will cause the total expenditure of the consumer to increase because total expenditure = quantity demanded × price. The demand will not change but the change in price cause consumer’s total expenditure to increase.

Detailed explanation-2: -When demand is price inelastic, a given percentage change in price results in a smaller percentage change in quantity demanded. That implies that total revenue will move in the direction of the price change: an increase in price will increase total revenue, and a reduction in price will reduce it.

Detailed explanation-3: -Inelastic demand in economics occurs when the demand for a product doesn’t change as much as the price. A steep demand curve graphically represents inelastic demand. The steeper the curve, the more inelastic the demand for that product or service is.