{"id":89724,"date":"2025-06-01T10:11:25","date_gmt":"2025-06-01T10:11:25","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=89724"},"modified":"2025-06-01T10:11:25","modified_gmt":"2025-06-01T10:11:25","slug":"when-a-fall-in-price-of-a-commodity-reduces-total-expenditure-and-a-ri","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/when-a-fall-in-price-of-a-commodity-reduces-total-expenditure-and-a-ri\/","title":{"rendered":"When a fall in price of a commodity reduces total expenditure and a ri"},"content":{"rendered":"

When a fall in price of a commodity reduces total expenditure and a rise in price increases it, price elasticity of demand will be :<\/p>\n

[amp_mcq option1=”= 1″ option2=”< 1\" option3=\"> 1″ option4=”Infinity” correct=”option2″]<\/p>\n

\n
\n
This question was previously asked in<\/div>\n
UPSC CAPF – 2014<\/div>\n<\/div>\n
Download PDF<\/a>Attempt Online<\/a><\/div>\n<\/div>\n
\nThe relationship between a change in price and the resulting change in total expenditure (Price * Quantity) reveals the price elasticity of demand.
\nIf a fall in price reduces total expenditure (P\u2193, TE\u2193), it means the increase in quantity demanded (Q\u2191) was proportionally smaller than the decrease in price (\u0394Q% < |\u0394P%|). This is the characteristic of inelastic demand.\nIf a rise in price increases total expenditure (P\u2191, TE\u2191), it means the decrease in quantity demanded (Q\u2193) was proportionally smaller than the increase in price (\u0394Q% < |\u0394P%|). This is also the characteristic of inelastic demand.\nIn both cases, the price elasticity of demand (|Ed|) is less than 1.\n<\/section>\n
\nFor inelastic demand (|Ed| < 1), price and total expenditure move in the same direction: if price increases, total expenditure increases; if price decreases, total expenditure decreases.\n<\/section>\n
\nConversely, for elastic demand (|Ed| > 1), price and total expenditure move in opposite directions: if price increases, total expenditure decreases; if price decreases, total expenditure increases. For unit elastic demand (|Ed| = 1), total expenditure remains unchanged with a change in price.
\n<\/section>\n","protected":false},"excerpt":{"rendered":"

When a fall in price of a commodity reduces total expenditure and a rise in price increases it, price elasticity of demand will be : [amp_mcq option1=”= 1″ option2=”< 1\" option3=\"> 1″ option4=”Infinity” correct=”option2″] This question was previously asked in UPSC CAPF – 2014 Download PDFAttempt Online The relationship between a change in price and … <\/p>\n

Detailed SolutionWhen a fall in price of a commodity reduces total expenditure and a ri<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1085],"tags":[1468,1120,1261],"class_list":["post-89724","post","type-post","status-publish","format-standard","hentry","category-upsc-capf","tag-1468","tag-economic-development","tag-nature-of-indian-economy","no-featured-image-padding"],"yoast_head":"\nWhen a fall in price of a commodity reduces total expenditure and a ri<\/title>\n<meta name=\"description\" content=\"The relationship between a change in price and the resulting change in total expenditure (Price * Quantity) reveals the price elasticity of demand. If a fall in price reduces total expenditure (P\u2193, TE\u2193), it means the increase in quantity demanded (Q\u2191) was proportionally smaller than the decrease in price (\u0394Q% < |\u0394P%|). This is the characteristic of inelastic demand. If a rise in price increases total expenditure (P\u2191, TE\u2191), it means the decrease in quantity demanded (Q\u2193) was proportionally smaller than the increase in price (\u0394Q% < |\u0394P%|). This is also the characteristic of inelastic demand. In both cases, the price elasticity of demand (|Ed|) is less than 1. For inelastic demand (|Ed| < 1), price and total expenditure move in the same direction: if price increases, total expenditure increases; if price decreases, total expenditure decreases.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/when-a-fall-in-price-of-a-commodity-reduces-total-expenditure-and-a-ri\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"When a fall in price of a commodity reduces total expenditure and a ri\" \/>\n<meta property=\"og:description\" content=\"The relationship between a change in price and the resulting change in total expenditure (Price * Quantity) reveals the price elasticity of demand. If a fall in price reduces total expenditure (P\u2193, TE\u2193), it means the increase in quantity demanded (Q\u2191) was proportionally smaller than the decrease in price (\u0394Q% < |\u0394P%|). This is the characteristic of inelastic demand. If a rise in price increases total expenditure (P\u2191, TE\u2191), it means the decrease in quantity demanded (Q\u2193) was proportionally smaller than the increase in price (\u0394Q% < |\u0394P%|). This is also the characteristic of inelastic demand. In both cases, the price elasticity of demand (|Ed|) is less than 1. For inelastic demand (|Ed| < 1), price and total expenditure move in the same direction: if price increases, total expenditure increases; if price decreases, total expenditure decreases.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/when-a-fall-in-price-of-a-commodity-reduces-total-expenditure-and-a-ri\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-01T10:11:25+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"When a fall in price of a commodity reduces total expenditure and a ri","description":"The relationship between a change in price and the resulting change in total expenditure (Price * Quantity) reveals the price elasticity of demand. If a fall in price reduces total expenditure (P\u2193, TE\u2193), it means the increase in quantity demanded (Q\u2191) was proportionally smaller than the decrease in price (\u0394Q% < |\u0394P%|). This is the characteristic of inelastic demand. If a rise in price increases total expenditure (P\u2191, TE\u2191), it means the decrease in quantity demanded (Q\u2193) was proportionally smaller than the increase in price (\u0394Q% < |\u0394P%|). This is also the characteristic of inelastic demand. In both cases, the price elasticity of demand (|Ed|) is less than 1. For inelastic demand (|Ed| < 1), price and total expenditure move in the same direction: if price increases, total expenditure increases; if price decreases, total expenditure decreases.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/when-a-fall-in-price-of-a-commodity-reduces-total-expenditure-and-a-ri\/","og_locale":"en_US","og_type":"article","og_title":"When a fall in price of a commodity reduces total expenditure and a ri","og_description":"The relationship between a change in price and the resulting change in total expenditure (Price * Quantity) reveals the price elasticity of demand. If a fall in price reduces total expenditure (P\u2193, TE\u2193), it means the increase in quantity demanded (Q\u2191) was proportionally smaller than the decrease in price (\u0394Q% < |\u0394P%|). This is the characteristic of inelastic demand. If a rise in price increases total expenditure (P\u2191, TE\u2191), it means the decrease in quantity demanded (Q\u2193) was proportionally smaller than the increase in price (\u0394Q% < |\u0394P%|). This is also the characteristic of inelastic demand. In both cases, the price elasticity of demand (|Ed|) is less than 1. For inelastic demand (|Ed| < 1), price and total expenditure move in the same direction: if price increases, total expenditure increases; if price decreases, total expenditure decreases.","og_url":"https:\/\/exam.pscnotes.com\/mcq\/when-a-fall-in-price-of-a-commodity-reduces-total-expenditure-and-a-ri\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2025-06-01T10:11:25+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/when-a-fall-in-price-of-a-commodity-reduces-total-expenditure-and-a-ri\/","url":"https:\/\/exam.pscnotes.com\/mcq\/when-a-fall-in-price-of-a-commodity-reduces-total-expenditure-and-a-ri\/","name":"When a fall in price of a commodity reduces total expenditure and a ri","isPartOf":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#website"},"datePublished":"2025-06-01T10:11:25+00:00","dateModified":"2025-06-01T10:11:25+00:00","author":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209"},"description":"The relationship between a change in price and the resulting change in total expenditure (Price * Quantity) reveals the price elasticity of demand. If a fall in price reduces total expenditure (P\u2193, TE\u2193), it means the increase in quantity demanded (Q\u2191) was proportionally smaller than the decrease in price (\u0394Q% < |\u0394P%|). This is the characteristic of inelastic demand. If a rise in price increases total expenditure (P\u2191, TE\u2191), it means the decrease in quantity demanded (Q\u2193) was proportionally smaller than the increase in price (\u0394Q% < |\u0394P%|). This is also the characteristic of inelastic demand. In both cases, the price elasticity of demand (|Ed|) is less than 1. 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