If a 5 percent change in the price of a good elicited a 5 percent change in the quantity demanded of the good, we would say that over this range of prices the good has a(n)
A) elastic demand.
B) inelastic demand.
C) perfectly elastic demand.
D) unit elasticity of demand.

Question

Quizplus · Accepted Answer

A 5 percent change in price causing a 5 percent change in quantity demanded indicates that the percentage change in quantity demanded is equal to the percentage change in price, meaning the elasticity of demand is equal to 1. This is known as unit elasticity of demand.

If a 5 Percent Change in the Price of a Good