When demand is unit elastic, a 10 percent change in the price of the good
A) will cause a change in quantity demanded of less than 10 percent.
B) will cause a change in quantity demanded equal to 10 percent.
C) will cause a change in quantity demanded greater than 10 percent.
D) will not cause any change in quantity demanded.

Question

Quizplus · Accepted Answer

When demand is unit elastic, a 10 percent change in price will cause an equal percentage change in quantity demanded, which is also 10 percent. This means that the elasticity of demand is equal to 1, indicating a proportional response to price changes.

When Demand Is Unit Elastic, a 10 Percent Change in the Price