Price Elasticity of Demand Definition Steps:

• Recall that price elasticity of demand (PED) measures the responsiveness of quantity demanded to a price change.
• PED is elastic if the absolute value exceeds 1, meaning quantity demanded changes more than proportionately to price.
• For a price fall in elastic demand, quantity rises more than proportionately, increasing total expenditure (price × quantity).
• Eliminate options not tied to proportionate changes or expenditure effects.

Why B is correct:

• In elastic demand (|PED| > 1), a price fall causes quantity to rise more than proportionately, so expenditure increases, per the total revenue test.

Why the others are wrong:

• A: True for all normal goods (elastic or inelastic), not specific to elasticity.
• C: Describes inelastic demand, where a price rise causes quantity to fall less than proportionately, increasing expenditure.
• D: True for all downward-sloping demand curves, regardless of elasticity.

Final answer: B