If demand is unit elastic,a price reduction will _____
A)increase revenues.
B)reduce revenues.
C)reduce total cost.
D)have no effect on revenues.
E)increase profits.

Question

Quizplus · Accepted Answer

If demand is unit elastic, a price reduction will not have a significant effect on revenues as the increase in demand will be offset by the decrease in price, resulting in the same total revenue. Therefore, a price reduction will have no effect on revenues.

If Demand Is Unit Elastic,a Price Reduction Will _____