Asked by Letty Lopez on Jul 17, 2024
Verified
If demand is unit elastic and price is _________,total revenue will ________.
A) raised;increase
B) raised;decrease
C) lowered;increase
D) lowered;remain unchanged
Unit Elastic
A scenario in demand or supply where a percentage change in price leads to an equal percentage change in quantity demanded or supplied.
- Determine the effect of price adjustments on total revenue with respect to elasticity
Verified Answer
MM
Marcel MansurJul 18, 2024
Final Answer :
D
Explanation :
If demand is unit elastic, a change in price will lead to an equal change in quantity demanded, resulting in no change in total revenue. Therefore, if price is lowered or raised, total revenue will remain unchanged.
Learning Objectives
- Determine the effect of price adjustments on total revenue with respect to elasticity