Respuesta :
The correct option is B. The demand for the Product L is unit elastic because if a change in price occurs that will affect unit
What is a Unit Elastic demand?
The economic theory known as unit elastic demand holds that when a product's price changes, the quantity desired also changes in an equal and proportional manner.
Given,
elasticity units (intially) = 100
Price ( intial ) = $10
Supply units (after change )= 25
Price = $20
% change in Supply = Supply units (intially) - Supply units (after change ) x 100 divide by Supply units (intially)
= 100 - 25 x 100/100 = 75%
% change in price = Price (after change) - Price (intially ) x 100 divide by price (intially)
= 20 - 10 x 100/10 =100%
Unit Elastricity = % change in supply divided by % change in price.
= 75%/100% = 0.75
Thus, we get 0.75 units of elasticity in demand for the product L.
Learn more about elasticity here:
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