When the price of magazines decreases by 10 percent, Efrain buys 10 percent more magazines. Efrain's price elasticity of demand is equal to _____, and his demand is:
A) 1; inelastic.
B) 10; elastic.
C) 10; inelastic.
D) 1; unit elastic.

Question

Quizplus · Accepted Answer

The price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. Here, both changes are 10 percent, making the elasticity 1, which is defined as unit elastic.

When the Price of Magazines Decreases by 10 Percent, Efrain