If the formula for elasticity results in a measure of elasticity (E)equal to 1,the increase in sales exactly offsets the decrease in price so that total revenue remains the same.

Question

Quizplus · Accepted Answer

When the price elasticity of demand (E) equals 1, it indicates unit elasticity, meaning that a given percentage change in price leads to an equal percentage change in quantity demanded, resulting in unchanged total revenue.

If the Formula for Elasticity Results in a Measure of Elasticity