If the demand for oranges is unit elastic, the price elasticity of demand for oranges is equal to:
A) 100
B) 1
C) 0
D) 0.5

Question

Quizplus · Accepted Answer

The price elasticity of demand measures the responsiveness of quantity demanded to changes in price. If the demand for oranges is unit elastic, then a 1% change in price will lead to a 1% change in quantity demanded. This means that the price elasticity of demand is equal to 1.

If the Demand for Oranges Is Unit Elastic, the Price