Exhibit 5-16 Consider Exhibit 5-16.Since the product P x Q remains constant between points a and b, demand must be
A)relatively inelastic
B)perfectly inelastic
C)unit elastic
D)perfectly elastic
E)relatively elastic

Question

Exhibit 5-16  Consider Exhibit 5-16.Since the product P x Q remains constant between points a and b, demand must be
A)relatively inelastic 
B)perfectly inelastic 
C)unit elastic 
D)perfectly elastic 
E)relatively elastic

Quizplus · Accepted Answer

When the product P x Q remains constant, it means that the change in price and quantity demanded has a proportional effect. This is the characteristic of unit elastic demand.