If a 10 percent change in the price of a good caused a 10 percent change in the quantity demanded of the good, we would say that over this range of prices the good has a(n)
A) elastic demand.
B) inelastic demand.
C) perfectly elastic demand.
D) unit elasticity of demand.

Question

Quizplus · Accepted Answer

A 10 percent change in price causing a 10 percent change in quantity demanded is indicative of unit elasticity of demand. This means that the percentage change in quantity demanded is equal to the percentage change in price. This implies that the total revenue earned by the seller remains the same, as any increase in price is exactly offset by a decrease in quantity demanded, and vice versa.

If a 10 Percent Change in the Price of a Good