135k views
3 votes
Suppose that the total revenue received by a company selling basketballs is $600 when the price is set at $30 per basketball and $600 when the price is set at $20 per basketball. Without using the midpoint formula, identify whether demand is elastic, inelastic, or unit-elastic over this price range.

User Xref
by
7.6k points

1 Answer

2 votes

Answer: Demand is Unit - Elastic over this price range.

Step-by-step explanation:

When total revenue remains the same over various price level then the demand curve is unitary elastic.

Unit-Elastic demand - It depicts a demand curve which is perfectly responsiveness to changes in cost. That is, the amount of demand changes as indicated by a similar percentage changes in prices.

A demand curve with an elasticity of 1 is called as unitary elasticity of demand.

User Richard Topchii
by
8.7k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories