How will the expenditure on the good be affected if there is a 10 % increase in the price of the good?
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Suppose the price elasticity of demand for a good is – 0.2. How will the expenditure on the good be affected if there is a 10 % increase in the price of the good?
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As the price elasticity of demand, pe, is smaller than one in elastic demand, a rise in the price of the good will result in an increase in expenditure. Because price and expenditure are positively connected in the case of inelastic demand. 

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