Demand is said to have unit elasticity if the price elasticity of demand is
A)less than 1.
B)greater than 1.
C)equal to 1.
D)equal to 0.

Question

Quizplus · Accepted Answer

Unit elasticity refers to a situation where the percentage change in quantity demanded is equivalent to the percentage change in price i.e. when the price elasticity of demand is equal to 1. This means that if the price increases by 10%, the quantity demanded will decrease by 10%, resulting in no change in total revenue. Similarly, if the price decreases by 10%, the quantity demanded will increase by 10%, again resulting in no change in total revenue.

Demand Is Said to Have Unit Elasticity If the Price