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If demand is unit elastic:
Suggested Answer: C
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Choice 'c' is correct.
Choices 'a', 'b', and 'd' are incorrect, per the above calculation.
34 comments · newest first
BE
Beatriz
10 months ago
Price changes don’t affect total revenue in this case.
BE
Berry
11 months ago
Definitely not A, that’s for sure!
EZ
Ezekiel
11 months ago
Wait, how can that be? Seems counterintuitive.
JI
Jill
11 months ago
I agree, option D is correct!
JO
Josue
11 months ago
Total revenue stays the same with unit elastic demand.
LE
Leonora
12 months ago
I remember discussing how unit elastic means the percentage change in quantity demanded equals the percentage change in price. So, I think D makes the most sense here.
DO
Donte
12 months ago
I recall something about how total revenue changes with price elasticity, but I'm confused about unit elastic. I might lean towards A, but I'm not confident.
ST
Stephania
12 months ago
I'm not entirely sure, but I feel like we practiced a question where an increase in price with unit elastic demand didn't change total revenue. Could it be D?
HE
Hershel
1 year ago
I think I remember that if demand is unit elastic, total revenue stays the same when price changes. So, maybe it's D?
GE
Gearldine
1 year ago
I'm pretty confident on this one. If demand is unit elastic, an increase in price will lead to a decline in quantity that exactly offsets the price increase, so total revenue stays the same. Option D is the correct answer.
NI
Nicholle
1 year ago
I'm a little confused on this one. I know unit elastic demand means a 1% change in price leads to a 1% change in quantity, but I'm not sure how that affects total revenue. Let me think this through carefully.
RA
Ranee
1 year ago
Okay, I think I've got this. If demand is unit elastic, an increase in price will result in a decline in the quantity demanded that is exactly proportional to the increase in price, so total revenue stays the same.
FL
Flo
1 year ago
Hmm, this question seems straightforward, but I want to make sure I understand the concept of unit elastic demand before answering.
CH
Charisse
1 year ago
Wait, is unit elastic demand the same as perfectly elastic demand? I feel like I'm missing something here. Someone please help me out!
MI
Mica
1 year ago
Oh man, I'm so confused. Is unit elastic demand the same as inelastic demand? I can never remember which one is which. Guess I'll just go with C and hope for the best!
TA
Talia
1 year ago
Hmm, this is a tricky one. I'm going to have to go with option D - an increase in price will have no effect on total revenue. That's what unit elastic demand means, right?
EL
Elke
1 year ago
I agree, let's stick with option D for unit elastic demand.
DO
Dottie
1 year ago
I see your point, but I still think option D is the best choice here.
HI
Hillary
1 year ago
But what about option A? Wouldn't an increase in price lead to a decline in total revenue?
FL
Florinda
1 year ago
I think you're right, option D makes sense for unit elastic demand.
SH
Sharika
1 year ago
I think the correct answer is C. If demand is unit elastic, a price increase will actually lead to an increase in total revenue.
FA
Fanny
1 year ago
Oh, I see. Thanks for clarifying that!
HE
Herman
1 year ago
Actually, the correct answer is A. An increase in price will result in a decline in total revenue.
LE
Levi
1 year ago
I think the correct answer is C. If demand is unit elastic, a price increase will actually lead to an increase in total revenue.
GL
Glory
1 year ago
I agree with Amie. When demand is unit elastic, consumers are sensitive to price changes, so increasing the price will lead to a decrease in total revenue.
MI
Michell
1 year ago
I'm pretty sure the answer is B. If demand is unit elastic, a price increase will result in a less-than-proportional decrease in quantity demanded, so total revenue should decline.
RA
Rana
1 year ago
Exactly, it's all about that balance between price and quantity demanded.
RO
Rossana
1 year ago
So, total revenue would go down even though the price went up.
NI
Nieves
1 year ago
Yeah, if demand is unit elastic, a price increase should lead to a smaller decrease in quantity demanded.
BE
Beth
1 year ago
Yeah, if demand is unit elastic, a price increase should lead to a decrease in quantity demanded that is less than the increase in price.
TR
Trina
1 year ago
I think you're right, B sounds like the correct answer.
BE
Bettina
1 year ago
I think you're right, B sounds like the correct answer.
AM
Amie
1 year ago
I think an increase in price will result in a decline in total revenue.
TH
Theron
2 years ago
If demand is unit elastic, what do you think will happen if there's an increase in price?