# Microeconomics: Unitary elasticity properties

1. Mar 1, 2014

1. The problem statement, all variables and given/known data
The demand for good A is unit elastic. This means that a 5 percent increase in price will ______
A) result in an infinite increase in the quantity of A demanded.
B) result in a 1 percent decrease in the quantity of A demanded.
C) result in 5 percent increase in quantity demanded.
D) have no impact on the consumer's spending on the good.
E) increase consumer's spending on the good by 5 percent.

2. Relevant equations

3. The attempt at a solution
I'm sure A to C is false which only leaves the answer to be D or E.
I know unitary elasticity has a proportional change in terms of % change in price and % change in quantity demanded. Assuming consumerspending= P x Q, TR will remain relatively the same. So would it be D?

Last edited: Mar 1, 2014
2. Mar 1, 2014

### epenguin

I know nothing about economics (OK I have just heard of more and less elastic demand) but find it obvious how you would define a thing like this, would be surprised if I was wrong. Maybe if you looked the definition in your textbook? - I don't suppose they are after guesses here.