Which of the statements below does not describe a demand curve that is unit elastic?
A) The percentage change in the quantity demanded = percentage change in product price.
B) An increase in product price will not change total revenue.
C) The price elasticity of demand equals one.
D) A change in price does not change quantity demanded.
E) A decrease in product price will not change total revenue.

Question

Quizplus · Accepted Answer

A demand curve that is unit elastic has a price elasticity of demand equal to one. This means that a change in price will result in an equal percentage change in quantity demanded, but it will not necessarily result in no change in total revenue. In fact, the total revenue will only remain constant if the percentage change in price and quantity demanded are equal. Therefore, statement D does not describe a demand curve that is unit elastic because it implies that a change in price will have no effect on the quantity demanded, which is not true for a unit elastic demand curve.

Which of the Statements Below Does Not Describe a Demand