Suppose there is a 6 percent increase in the price of good X and a resulting 6 percent decrease in the quantity of X demanded. Price elasticity of demand for X is
A) 0.
B) 1.
C) 6.
D) 36.

Question

Quizplus · Accepted Answer

Since the percentage change in price and quantity demanded is the same (6%), the price elasticity of demand is equal to 1. This indicates unit elasticity, meaning that the change in quantity demanded is proportionate to the change in price.

Suppose There Is a 6 Percent Increase in the Price