The price elasticity of demand for a textbook is estimated to be 1 no matter what the price or quantity demanded. In this case,
A) a 10 percent increase in price will result in a 10 percent increase in total revenues.
B) a 10 percent increase in price will result in a 10 percent decrease in the quantity demanded.
C) a 10 percent increase in price will result in a 10 percent decrease in total revenues.
D) a 10 percent increase in price will result in a 10 percent increase in quantity demanded.

Question

Quizplus · Accepted Answer

When the price elasticity of demand is 1, it is unitary elastic, meaning a percentage change in price results in an equal percentage change in quantity demanded in the opposite direction.

The Price Elasticity of Demand for a Textbook Is Estimated