If the percentage change in the price of a good and the percentage change in the quantity demanded of the good are both equal to 20%, then the price elasticity of demand for the good is _____.
A) equal to -1
B) inelastic
C) unit elastic
D) greater than 1

Question

Quizplus · Accepted Answer

The price elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. If both changes are 20%, the elasticity is 20%/20% = 1, which is defined as unit elastic.

If the Percentage Change in the Price of a Good