When demand is unit elastic,price elasticity of demand
A) equals 1,and total revenue and price move in the same direction.
B) equals 1,and total revenue and price move in opposite directions.
C) equals 1,and total revenue does not change when price changes.
D) equals 0,and total revenue does not change when price changes.

Question

Quizplus · Accepted Answer

When demand is unit elastic, the price elasticity of demand equals 1. This means that a change in price will result in an equal percentage change in the quantity demanded, resulting in no change in total revenue. Therefore, the correct option is C, where the price elasticity of demand is equal to 1 and total revenue does not change when the price changes.

When Demand Is Unit Elastic,price Elasticity of Demand