Question

    Which of the following is a possible change in

    total revenue that occurs if you increase the price of a good with unit elasticity?
    A 1 percent Correct Answer Incorrect Answer
    B 10 percent Correct Answer Incorrect Answer
    C 2 percent Correct Answer Incorrect Answer
    D 0 percent Correct Answer Incorrect Answer

    Solution

    Unit elasticity means that an increase in price results in an equal decrease in quantity. As a result, TR doesn’t change if the price increases on a good with a unit elastic demand

    Practice Next