alleryStart learning →A one percent change in price leads to an exactly proportional one percent change in quantity. What does the source call this case?
AUnitary elasticity
BInfinite elasticity
CPerfect inelasticity
DCross-price elasticity
Answer & Solution
Correct answer: A. Unitary elasticity
1. Table 5.1 defines this case as when the percentage change in quantity equals the percentage change in price.
2. That proportional one-to-one response is called unitary elasticity.
3. Infinite elasticity and perfect inelasticity are the two extreme polar cases, not a proportional response.
4. Cross-price elasticity relates the price of one good to the quantity demanded of a different good, not a single good's own price and quantity.
_Source: OpenStax Principles of Microeconomics for AP Courses (CC BY 4.0), Ch 5 "Elasticity", section 5.1 | Price Elasticity of Demand and Price Elasticity of Supply_
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