WBCS.LIVE practice question

When the percentage change in quantity demanded is exactly equal to the percentage change in price, the demand is considered to be:

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. Perfectly elastic
  2. Relatively inelastic
  3. Unitary elastic
  4. Perfectly inelastic

Correct answer and explanation

Correct answer: Unitary elastic

Explanation: āœ… Correct Answer: C) Unitary elastic šŸ“š Explanation: When the percentage change in the quantity demanded of a product exactly matches the percentage change in its price, the demand is unitary elastic. In this specific scenario, the calculated price elasticity of demand is equal to exactly one. Consequently, any change in price will leave the total revenue or total expenditure on that good completely unchanged.