A unit price elastic demand exists if a 10 percent change in the price of a good results in a percentage change (in absolute value terms) in quantity demanded that is:
A) less than 0.
B) greater than 0 but less than 10.
C) equal to 10.
D) greater than 10.

Question

Quizplus · Accepted Answer

A unit price elastic demand means that there is a proportional change in quantity demanded with a change in price. Therefore, if the price of a good changes by 10 percent and the quantity demanded changes by 10 percent (in absolute value terms), then the demand is considered to be unit price elastic. This is reflected in choice C, where the percentage change in quantity demanded is equal to the percentage change in price.

A Unit Price Elastic Demand Exists If a 10 Percent