When the absolute percentage change in quantity demanded is just equal to the percentage change in price, demand is
A) elastic.
B) perfectly inelastic.
C) unit-elastic.
D) relatively inelastic.

Question

Quizplus · Accepted Answer

When the absolute percentage change in quantity demanded is just equal to the percentage change in price, demand is considered as unit-elastic. It means that the change in price results in an exactly proportional change in the quantity demanded of the good or service. The elasticity of demand for a good or service can determine how sensitive consumers are to price changes. If the demand is elastic, a small change in price can lead to a significant change in quantity demanded, while if the demand is inelastic, the change in quantity demanded is less sensitive to the change in price. If the demand is perfectly inelastic, quantity demanded remains unchanged regardless of the change in price.

When the Absolute Percentage Change in Quantity Demanded Is Just