If demand is unit elastic, then a 10 percent increase in the price will lead to a 10 percent increase in quantity demanded.

Question

Quizplus · Accepted Answer

If demand is unit elastic, a change in price will lead to an equal proportional change in quantity demanded. In this case, a 10 percent increase in price will lead to a less-than-10 percent increase in quantity demanded. Similarly, a 10 percent decrease in price will lead to a slightly more than 10 percent increase in quantity demanded.

If Demand Is Unit Elastic, Then a 10 Percent Increase