If we assume that price decreases and total expenditures increase we may conclude that elasticity of demand is

greater than one
equal to one
less than one but more than zero
equal to zero

The correct answer is A. greater than one.

If price decreases and total expenditures increase, then demand is elastic. Elastic demand means that consumers are very responsive to changes in price. When the price of a good decreases, consumers buy more of it. This causes total expenditures to increase.

If price decreases and total expenditures remain the same, then demand is unit elastic. Unit elastic demand means that consumers are not very responsive to changes in price. When the price of a good decreases, consumers buy more of it, but not enough to offset the decrease in price. This causes total expenditures to remain the same.

If price decreases and total expenditures decrease, then demand is inelastic. Inelastic demand means that consumers are not very responsive to changes in price. When the price of a good decreases, consumers do not buy much more of it. This causes total expenditures to decrease.

In conclusion, if price decreases and total expenditures increase, then demand is elastic.

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