Question

When the elasticity of demand is unitary?

Hint:

Unitary elasticity means the change in demand perfectly matches the change in price. If price goes down 10%, demand goes up 10%.

Answer 1

The elasticity of demand is unitary when a percentage change in the price of a product results in an equal percentage change in the quantity demanded. In this case, the price elasticity of demand (PED) is equal to When demand is unitary elastic, any change in price will leave total revenue unchanged.