The president of a college has been told that when they raised their tuition by 15 percent the previous year, total revenue from tuition remained unchanged. Assuming the change in revenue is due to the change in tuition only, the president could conclude that demand for that college, over that tuition range, must be:
A) greater than 1.
B) less than 1.
C) equal to 1.
D) equal to zero.

Question

Quizplus · Accepted Answer

The demand is unit elastic (equal to 1) because the percentage change in quantity demanded is equal to the percentage change in price, resulting in unchanged total revenue.

The President of a College Has Been Told That When