What does unitary elastic demand mean?

Economics Dec 18, 2020

Expert Solution

Unitary elastic demand means that the change in demand is equal to the change in price. For example, if the price of cookies goes up 50% and the demand for cookies falls 50%, then it is unitary elastic as the ratio equal to 1. A ratio greater would make the demand highly elastic and a ratio lower than 1 would make the demand low elastic.

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