If demand is unit elastic:
A)Total revenue and prices rise and fall together.
B)Total revenue rises as price falls.
C)Total revenue falls as price rises.
D)Total revenue remains constant as price rises or falls.

Question

If demand is unit elastic:
A)​Total revenue and prices rise and fall together.
B)​Total revenue rises as price falls.
C)​Total revenue falls as price rises.
D)​Total revenue remains constant as price rises or falls.

Quizplus · Accepted Answer

If demand is unit elastic, it means that the percentage change in quantity demanded is exactly equal to the percentage change in price. In such a case, the increase or decrease in price results in an equal decrease or increase in quantity demanded, leading to no change in total revenue. Therefore, total revenue remains constant as price rises or falls.

If Demand Is Unit Elastic