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What is the demand relationship in which the percentage change in quantity of a product demanded is the same as the percentage change in price in absolute value?

1) Perfectly elastic demand
2) Perfectly inelastic demand
3) Unitary elastic demand
4) Cross elastic demand

User Blubberbo
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1 Answer

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Final answer:

The demand relationship where percentage changes in quantity demanded and price are equal in absolute value is called unitary elastic demand.

Step-by-step explanation:

The demand relationship in which the percentage change in quantity of a product demanded is the same as the percentage change in price in absolute value is known as unitary elastic demand. This means that if the price of a product increases by a certain percentage, the quantity demanded of that product will decrease by the same percentage, and vice versa.

For example, a 5% increase in price would result in a 5% decrease in quantity demanded. Price elasticity of demand is the concept that measures this responsiveness of the quantity demanded to a change in price.

User Frits
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