If demand is unit elastic, then
A) a ten percent increase in price leads to a one percent decrease in quantity demanded.
B) the unit change in quantity demanded equals the unit change in price.
C) a two percent increase in price leads to a two percent decrease in quantity demanded.
D) an increase in price of any amount leads to quantity demanded falling to zero.

Question

Quizplus · Accepted Answer

When demand is unit elastic, the percentage change in quantity demanded is equal to the percentage change in price, meaning a two percent increase in price leads to a two percent decrease in quantity demanded.

If Demand Is Unit Elastic, Then