Assuming price elasticity of demand is reported as an absolute value, a good with unit elastic demand has an elasticity:
A) between zero and one.
B) greater than one.
C) less than one, but greater than zero.
D) equal to one.

Question

Quizplus · Accepted Answer

Unit elastic demand means that the percentage change in quantity demanded is equal to the percentage change in price. This is only possible when the elasticity of demand is equal to one. Absolute values are used to show the magnitude of elasticity, so the answer is D.

Assuming Price Elasticity of Demand Is Reported as an Absolute