When heavy rain ruined the banana crop in Central America, the price of bananas rose from $0.70 a pound to $0.90. Banana sellers sold fewer bananas, but their total revenue remained unchanged.

The quantity of bananas decreased by _____ percent.

• Initial Price (P0) = $0.70
• Current Price (P1) = $0.90

Percentage Change in price = (P1 - P0) / P0 * 100

Percentage change in price = (0.90 - 0.70) / 0.70 * 100

Percentage change in price = 28.57%

Since the total revenues remain unchanged, it shows that the demand for the good is unitary elastic in nature, in which case, elasticity = -1

Price Elasticity = Percentage change in quantity demanded / Percentage change in price

Putting the value of elasticity and change in price, we have

Percentage change in quantity demanded = - 28.57%

Hence, the quantity demanded of the bananas decreased by 28.57%.