If due to fall in price, total expenditure on the commodity falls, it indicates?

Option 1 -> When elasticity is zero (perfectly inelastic), quantity doesn't change with price, so expenditure falls with price - this is a specific case.

Option 2 -> When elasticity is less than unity (inelastic demand), a fall in price causes a proportionately smaller increase in quantity demanded, leading to fall in total expenditure.

Option 3 -> When elasticity is infinity (perfectly elastic), consumers buy any quantity at the given price, and a price fall would increase total expenditure significantly.

Option 4 -> When elasticity is greater than unity (elastic demand), a fall in price causes a proportionately larger increase in quantity demanded, leading to increase in total expenditure.

Hence, Option 2: price elasticity of demand is less than unity -> When demand is inelastic (Ed < 1), consumers are relatively unresponsive to price changes. So when price falls, the percentage increase in quantity demanded is smaller than the percentage decrease in price. This results in a net decrease in total expenditure (Price × Quantity). For example, if price falls by 10% but quantity increases by only 5%, total expenditure decreases. This option correctly captures the general relationship for inelastic demand -> correct