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    Question

    In terms of economics, demand would be inelastic when

    A increase in price of samosa leads to increase in total revenue. Correct Answer Incorrect Answer
    B increase in price of samosa leads to decrease in total revenue. Correct Answer Incorrect Answer
    C increase in price of samosa by 10% leads to fall in quantity demanded by 10%. Correct Answer Incorrect Answer
    D None of these Correct Answer Incorrect Answer

    Solution

    Total revenue (Price Γ— Quantity) increases when price is increased only if the percentage change in quantity demanded is less than the percentage change in price. This is the definition of inelastic demand (% change Qd < % change P).

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