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What is unitary elastic demand?


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Solution

Explain the unitary elastic demand.

If a change in the price of an item generates an equivalent change in the quantity required, the demand for that good is unitary elastic. To put it another way, the elasticity coefficient is 1.

For instance, if the price of a mobile phone rises by 20%, the quantity of mobile phones demand falls by 20%.

Hence, demand is considered to be unitary elastic when the percentage change in quantity sought equals the percentage change in price.


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