Suppose a local photographer increases his prices by 8 percent and quantity demanded decreases by the same percentage.This set of facts indicates that the demand for his services is
A) inelastic.
B) elastic.
C) unit elastic.
D) perfectly elastic.
E) perfectly inelastic.

Question

Quizplus · Accepted Answer

When the percentage change in quantity demanded is equal to the percentage change in price, the demand is considered unit elastic. This means that the proportionate change in quantity demanded is exactly the same as the proportionate change in price, indicating a unitary elasticity of demand.

Suppose a Local Photographer Increases His Prices by 8 Percent