A)Suppose the price elasticity of demand for cereal is -1.01. If so, is the demand for cereal is unit-elastic inelastic, or elastic?

B)In another example, assume the price elasticity of demand for a particular magazine is -1.93. Is the demand for the magazine inelastic, unit-elastic, or elastic?

A) When the price elasticity of demand is -1.01, it indicates that a one percentage change in price of the good, changes the quantity demanded of the good by 1.01%. This indicates that the demand of the good is relatively elastic in nature, as the change in price by is leading to more than one percent change in quantity demanded of the good.

B) When the price elasticity of demand is -1.93, it indicates that a one percent change in price of the good leads to 1.93% change in quantity demanded of the good. The demand of the good is thus relatively elastic in nature, as a one percent change in price is leading to increase in the quantity demanded of the good by more than 1%.