If the demand for a good is unit elastic
A) a 5 percent increase in price results in a 5 percent increase in total revenue.
B) a 5 percent increase in price results in a 5 percent decrease in total revenue.
C) a 5 percent increase in price does not change total revenue.
D) the demand curve is a straight line with slope of -1.

Question

Quizplus · Accepted Answer

When demand is unit elastic, the percentage change in quantity demanded is equal to the percentage change in price, so total revenue remains unchanged.

If the Demand for a Good Is Unit Elastic