unit elastic demand

Definition

A type of price elasticity that assumes a move higher in prices will cause a proportional decrease in demand. For example the unit elastic demand for a one dollar move higher in the price of a good will generally cause a one unit decrease in the demand of the same good, leaving revenues unchanged.

Use unit elastic demand in a sentence

  • As the price of athletic shoes increased, consumer demand decreased proportionally proving that the product was an example of unit elastic demand.

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