CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

If the price elasticity of demand is unit, then a fall in price ______.
A. reduces revenue.
B. leaves revenue unchanged.
C. increases revenue.
Explanation: This means the percentage change in quantity demanded equals the percentage change in price, so price changes will not alter the revenue.

User Contributed Comments 3

User Comment
ars2011 suppose price is 10 and qty demanded is 10 now price decreases by 1 percent price is now 9 and qty demanded by law of demand increases by one percent so now its 9 qty à price is now 99 a decrease aint it?
nirens ars2011 - no. Percentage change is negative in both scenarios. So a fall in price - fall in demand for unitary
dbalakos No it does not
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