If the total expenditure on perfume increases when the price of perfume falls,the price elasticity of demand is
A)unity (demand is unit elastic).
B)not determinable from the information given.
C)exactly zero.
D)less than one (demand is inelastic).
E)greater than one (demand is elastic).

Question

Quizplus · Accepted Answer

When the total expenditure on a good increases as its price falls, it indicates that the quantity demanded increases by a proportionally larger amount than the decrease in price, which means the demand is elastic (price elasticity of demand is greater than one).

If the Total Expenditure on Perfume Increases When the Price