ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Unitary elastic demand is a type of demand which changes in the same proportion to its price. It means that the percentage change in demand is exactly equal to the percentage change in price. In the unitary demand, the product elasticity is negative as the product price decrease does not help to generate more revenue.

Detailed explanation-2: -If demand has a unitary elasticity at that quantity, then a moderate percentage change in the price will be offset by an equal percentage change in quantity-so the band will earn the same revenue whether it (moderately) increases or decreases the price of tickets.

Detailed explanation-3: -The demand is unitary if E(p)=1. That is to say, the demand is unitary if the percentage change in demand and price are relatively equal. The demand is inelastic if E(p)<1. That is to say, the demand is inelastic if the percentage change in demand is less than the percentage change in price.

Detailed explanation-4: -If price and quantity demanded change by the same percentage (i.e., if demand is unit price elastic), then total revenue does not change.

Detailed explanation-5: -When demand is unitary elastic, total revenue remains the same with change in prices.