Along a demand curve with unitary elasticity everywhere,total revenue:
A) increases as output increases.
B) decreases as output increases.
C) remains constant as output increases.
D) increases and then decreases as output increases.
E) decreases and then increases as output increases.

Question

Quizplus · Accepted Answer

When demand has unitary elasticity, a percentage change in price results in an equal percentage change in quantity demanded. This causes total revenue to remain constant as output increases since the price effect and the quantity effect cancel each other out.

Along a Demand Curve with Unitary Elasticity Everywhere,total Revenue