If demand is unitary elastic, what happens to total revenue if the price increases by 5%?
A) It increases by 5%.
B) It decreases by 5%.
C) It decreases by less than 5%.
D) It stays the same.

Question

Quizplus · Accepted Answer

When demand is unitary elastic, a percentage change in price results in an equal percentage change in quantity demanded in the opposite direction, leaving total revenue unchanged.

If Demand Is Unitary Elastic, What Happens to Total Revenue