What happens to revenues when the demand curve is unit elastic and the price changes?
A) Revenues increase when the price increases.
B) Revenues remain unchanged.
C) Revenues decrease when the price increases.
D) The change in revenues cannot be estimated.

Question

Quizplus · Accepted Answer

When a demand curve is unit elastic, a change in price results in an equal percentage change in quantity demanded, resulting in no change in total revenue.

What Happens to Revenues When the Demand Curve Is Unit