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Consumer expenditure maximized

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Reference no: EM131217611

A small increase in price causes total expenditure to increase if demand is inelastic, and decrease if demand is elastic. Total expenditure is largest at the price for which the elasticity is equal to -1.

Suppose that the demand function is given by Qd=24-b x P

Suppose that b=2. At which price is consumer expenditure maximized?

Reference no: EM131217611

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