ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The elasticity of demand is mathematically determined
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The elasticity of demand is different at each unit on the price range
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The demand is inelastic at a low price but becomes elastic as the price rises
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The percentage change in quantity demanded is the same as the percentage change in price
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Detailed explanation-1: -Unitary elasticity means that a given percentage change in price leads to an equal percentage change in quantity demanded or supplied.
Detailed explanation-2: -When percentage change in quantity demanded is equal to the percentage change in price, the elasticity of demand is unitary elastic.
Detailed explanation-3: -Unit elastic demand is referred to as a demand in which any change in the price of a good leads to an equally proportional change in quantity demanded. In other words, the unit elastic demand implies that the percentage change in quantity demanded is exactly the same as the percentage change in price.
Detailed explanation-4: -If the change in quantity purchased is the same as the price change (say, 10% รท 10% = 1), then the product is said to have unit (or unitary) price elasticity. Finally, if the quantity purchased changes less than the price (say, -5% demanded for a +10% change in price), then the product is deemed inelastic.
Detailed explanation-5: -Answer and Explanation: If demand is unit elastic, a 25 percent increase in price will result in 25 percent decrease in quantity demanded.