Suppose a local bookstore notices that a 2 percent increase in book prices leads to a 2 percent decrease in the number of books sold.Which of the following is true?
A)Demand for books is price elastic.
B)The store's sales revenue did not change.
C)Demand for books is price inelastic.
D)Demand for books is perfectly inelastic.
E)The bookstore could increase revenue by further lowering prices.

Question

Quizplus · Accepted Answer

The percentage change in quantity demanded is equal to the percentage change in price, indicating unitary elasticity, meaning total revenue remains unchanged.

Suppose a Local Bookstore Notices That a 2 Percent Increase