When the price elasticity of demand is unitary and prices go up,total _____.
A)revenues stay the same
B)revenues increase
C)revenues decline
D)profits increase

Question

Quizplus · Accepted Answer

When the price elasticity of demand is unitary (equal to -1), a change in price will result in an equal and opposite percentage change in quantity demanded. This means that total revenues will not change, as the increase in price is offset by the decrease in quantity demanded. Therefore, choice A is the best answer.

When the Price Elasticity of Demand Is Unitary and Prices