A 4 percent reduction in the price of a product has zero effect on the dollar amount of consumer expenditure on the product. The price elasticity of demand is
A)zero.
B)greater than zero.
C)greater than zero but less than 1.
D)equal to 1.

Question

Quizplus · Accepted Answer

The price elasticity of demand is equal to 1, indicating unit elasticity. This means that the percentage change in quantity demanded is exactly equal to the percentage change in price, resulting in no change in total expenditure.

A 4 Percent Reduction in the Price of a Product