When demand is ____ a percentage change in ____ is exactly offset by the same percentage change in ____ demanded,the net result being a constant total consumer expenditure.
A) elastic; price; quantity
B) unit elastic; price; quantity
C) inelastic; quantity; price
D) inelastic; price; quantity
E) none of the above

Question

Quizplus · Accepted Answer

In unit elastic demand, a percentage change in price is exactly offset by the same percentage change in quantity demanded, resulting in a constant total consumer expenditure. Therefore, option B is the correct answer. Option A is incorrect because elastic demand would mean that a percentage change in price results in a greater percentage change in quantity demanded, resulting in a decrease in total consumer expenditure. Option C and D are incorrect because inelastic demand would mean that a percentage change in quantity or price does not significantly affect the total consumer expenditure.

When Demand Is ____ a Percentage Change in ____ Is

When Demand Is a Percentage Change in Is