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

Question

Quizplus · Accepted Answer

If the total expenditure on clothing decreases when the price falls, it indicates that the percentage decrease in price is greater than the percentage increase in quantity demanded, implying inelastic demand (elasticity less than one).

If the Total Expenditure on Clothing Decreases When the Price