ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Price and total revenue have a positive relationship when demand is inelastic (price elasticity < 1), which means that when price increases, total revenue will increase too.

Detailed explanation-2: -When demand is inelastic, a fall in the price of a commodity leads to fall in total expenditure on it. On the other hand, when price increases, total expenditure also increases. It means, in case of less elastic demand, price and total expenditure move in the same direction.

Detailed explanation-3: -For an inelastic good, a one percent change in the price results in a less than one percent change in the quantity demanded. A price increase for an inelastic good will increase total revenue while a price decrease for an inelastic good decreases total revenue.

Detailed explanation-4: -The correct answer is a) Price and total revenue move in the same direction. When the price of a product with inelastic demand is raised, the percentage increase in price is greater than the percentage change in demand.