question archive When demand is _____ a percentage change in _____ is exactly offset by the same percentage change in _____ demanded, the net result being constant total consumer expenditure
When demand is _____ a percentage change in _____ is exactly offset by the same percentage change in _____ demanded, the net result being constant total consumer expenditure
Subject:EconomicsPrice:2.88 Bought3
When demand is _____ a percentage change in _____ is exactly offset by the same percentage change in _____ demanded, the net result being constant total consumer expenditure.
a) elastic; price; quantity.
b) unit elastic; price; quantity.
c) inelastic; quantity; price.
d) inelastic; price; quantity.
e) none of the above.
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The correct option is b) unit elastic; price; quantity.
When demand is unit elastic a percentage change in price is exactly offset by the same percentage change in quantity demanded, the net result being constant total consumer expenditure.
When price and quantity change by the same percentages, the ratio is one and hence the elasticity is unit elasticity.
