What is the effect of a 10 percent price increase on quantity demanded if elasticity is equal to 1?
A)Quantity demanded does not change.
B)Quantity demanded drops by less than 10 percent.
C)Quantity demanded drops by 10 percent.
D)Quantity demanded drops by more than 10 percent.
E)Quantity demanded drops to 0.

Question

Quizplus · Accepted Answer

If the elasticity is equal to 1, a 10% increase in price will lead to a 10% decrease in quantity demanded.

What Is the Effect of a 10 Percent Price Increase