If demand is unit elastic a small increase in price will
A)raise total revenue.
B)lower total revenue.
C)not change total revenue.

Question

Quizplus · Accepted Answer

If demand is unit elastic, a small increase in price will lead to an equal decrease in quantity demanded. As a result, the increase in revenue from the higher price is offset by the decrease in revenue from the lower quantity sold, resulting in no change in total revenue. Therefore, the best choice is C, not change total revenue.

If Demand Is Unit Elastic a Small Increase in Price