If the demand for a commodity is inelastic, an increase in its price will cause the total expenditure of the consumers of the commodity to

September 27, 2022

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Q. If the demand for a commodity is inelastic, an increase in its price will cause the total expenditure of the consumers of the commodity to:

A. Remain the same

B. Increase

C. Decrease

D. Any of the above

Answer: Increase

The term ‘normal profit’ as used in the analysis of equilibrium of the firm under perfect competition, refers to