Suppose the price elasticity of demand for your economics textbook is −1.If the publisher raises the price by 5 percent,then _____
A)revenues will rise by 5 percent.
B)quantity demanded will rise by 5 percent.
C)total revenue will not change.
D)revenues will fall by 1 percent.
E)revenues will fall by 5 percent.

Question

Quizplus · Accepted Answer

When the price elasticity of demand is -1, it means the demand is unit elastic. A 5 percent increase in price will lead to a 5 percent decrease in quantity demanded, leaving total revenue unchanged.

Suppose the Price Elasticity of Demand for Your Economics Textbook