ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The sum of the price paid for one or more products or services multiplied by the amount of each item purchased.

Detailed explanation-2: -If the percent change in the quantity demanded is greater than the percent change in consumer expenditure, the demand is said to be expenditure elastic, or responsive to changes in consumer expenditure. (Example: A 1-percent change in expenditure induces a change in quantity demanded by more than 1 percent.)

Detailed explanation-3: -The total expenditures test compares the direction of a price change to the direction of change in total revenue or total expenditures. With elastic demand, a change in price moves in the opposite direction from the change in revenue.

Detailed explanation-4: -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.