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

Question

Quizplus · Accepted Answer

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

If the Total Expenditure on Clothing Decreases When the Price