Use the following to answer question(s): Demand, Elasticity, and Total Revenue

-(Exhibit: Demand, Elasticity, and Total Revenue) At point A on the demand curve in Panel (a), the price elasticity of demand is:
A) greater than -1.
B) equal to -1.
C) less than -1.
D) none of the above.

Question

Use the following to answer question(s): Demand, Elasticity, and Total Revenue
 
-(Exhibit: Demand, Elasticity, and Total Revenue) At point A on the demand curve in Panel (a), the price elasticity of demand is:
A) greater than -1. 
B) equal to -1. 
C) less than -1. 
D) none of the above.

Quizplus · Accepted Answer

At point A on the demand curve, the price elasticity of demand is -1, which indicates unit elasticity. This means that a change in price will result in exactly proportional change in quantity demanded, resulting in no change in total revenue.

Use the Following to Answer Question(s): Demand, Elasticity, and Total