Answer to Question #35267 in Microeconomics for Katty

Question

Yao's weekly demand for basketballs is given by Qd = 3-P^2 where P is the price of basketballs. At the current price, Yao's demand for basketballs is unit elastic. What is the current price of a basketball, and how many basketballs is Yao buying at this price?

Answer 1

The term "Unit elastic" is used when the price elasticity of demand is equal to 1. For example, change in price from 10 to11 (+10%) causes
change in quantity from 10 to 9 (-10%). 10%/10%=1.

Unitary Elastic for the Elasticity of Demand is a proportionate change in price and quantity. This means that the reaction of consumers to price changes
is stable and not dramatic like elastic products, and not small or no changes
in quantity like inelastic products. It's in the middle of these two. As price
goes up or down for unitary products, the total revenue from it stays
relatively the same.