Demand is said to be unit elastic if quantity demanded
A)changes by the same percent as the price.
B)changes by a larger percent than the price.
C)changes by a smaller percent than the price.
D)does not respond to a change in price.

Question

Quizplus · Accepted Answer

When the demand is unit elastic, the percentage change in quantity demanded is equal to the percentage change in price. In other words, a 1% increase in price will result in a 1% decrease in quantity demanded, and a 1% decrease in price will result in a 1% increase in quantity demanded. This indicates that demand is neither too sensitive nor too insensitive to price changes.

Demand Is Said to Be Unit Elastic If Quantity Demanded