A firm that changes its price and sees no change in the total revenues it receives is facing demand that is
A)price inelastic.
B)revenue inelastic.
C)unit elastic.
D)price elastic.

Question

Quizplus · Accepted Answer

Unit elastic demand means that the percentage change in quantity demanded is equal to the percentage change in price. Therefore, a change in price will not affect total revenue, as the increase in revenue from selling at a higher price is offset by the decrease in revenue from selling fewer units. This is why the firm observes no change in total revenue when it changes its price.

A Firm That Changes Its Price and Sees No Change