Figure 5-8. A demand curve is shown on the graph below. On the graph, Q represents quantity demanded and P represents price.

-Refer to Figure 5-8.Demand is unit elastic between prices of
A)$18 and $24.
B)$24 and $30.
C)$24 and $36.
D)$30 and $36.

Question

Figure 5-8. A demand curve is shown on the graph below. On the graph, Q represents quantity demanded and P represents price.
 
-Refer to Figure 5-8.Demand is unit elastic between prices of
A)$18 and $24. 
B)$24 and $30. 
C)$24 and $36. 
D)$30 and $36.

Quizplus · Accepted Answer

Unit elasticity exists when the percentage change in quantity demanded is equal to the percentage change in price. Looking at the demand curve in Figure 5-8, we can see that demand is unit elastic between prices of $24 and $36. This is because the curve passes through the midpoint of the axes, where the slope is equal to -1 (or the elasticity coefficient is equal to 1). Therefore, the correct choice is (C).