### Understanding Price Elasticity of Demand**Question:**When price elasticity of demand is unitary elastic, a slight increase in price will cause total revenue to:**Options:**- **A** Decrease- **B** Increase- **C** Not change at all**Explanation:**Price elasticity of demand measures how the quantity demanded of a good responds to a change in its price. When the price elasticity of demand is unitary elastic (elasticity equal to 1), it means that the percentage change in quantity demanded is exactly equal to the percentage change in price. In this scenario, a slight increase in price will have an offsetting decrease in quantity demanded, resulting in total revenue remaining unchanged.When demand is unitary elastic, total revenue (Price x Quantity) does not change with price fluctuations because the increase in price is exactly balanced by the decrease in quantity demanded.**Correct Answer: C) Not change at all.**

Terms: Unitary elastic: A given percentage change in price causes an equivalent percentage change in…

Answered: When price elasticity of demand is…

When price elasticity of demand is unitary elastic, a slight increase in price will cause total revenue to A) decrease. В increase. C not change at all.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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