Answer to Question #119325 in Microeconomics for Nitin

Question

what is unitary elasticity

Answer 1

Unitary elasticity simply means that the percentage change in the quantity demanded is the same as the percentage change in the price of the good or service. Mathematimatically, this would result in the elasticity of 1; hence, the term unitary. This means that increasing or decreasing the price of the good would have the same effect on its demand.

In contrast, when the price of an elastic good or service changes, the demand would also be changing. On the one hand, inelastic goods will have little to no changes in demand regardless of the change in the prices.