If a 10 per cent price increase generates a 10 per cent decrease in quantity demanded, then demand is
A) elastic.
B) inelastic.
C) perfectly inelastic.
D) perfectly elastic.
E) unit elastic.

Question

Quizplus · Accepted Answer

When a percentage increase in price leads to an equal percentage decrease in quantity demanded, the demand is considered unit elastic. This means the percentage change in quantity demanded is exactly the same as the percentage change in price, indicating a unit elasticity of demand.

If a 10 Per Cent Price Increase Generates a 10