Ceteris paribus,when the price elasticity of demand is unitary elastic,a decrease in:
A) Price results in no change to total revenue.
B) Total revenue indicates an increase in price.
C) Total revenue indicates a decrease in price.
D) Price results in an increase in total revenue.

Question

Quizplus · Accepted Answer

When the price elasticity of demand is unitary elastic, a decrease in price results in an equal increase in quantity demanded, resulting in no change in total revenue. This is because the percentage change in quantity demanded is equal to the percentage change in price, resulting in a constant total revenue.

Ceteris Paribus,when the Price Elasticity of Demand Is Unitary Elastic,a